The Middle East has accrued scores of new millionaires and billionaires in the past few decades, but too few are putting their money to good use.
There is a new trend in business but rather than making money, its focus is on giving it away. Philanthropy is — quite rightly — gaining greater attention among the rich. Billions of dollars are being handed out each year, and significantly more pledged for the future.
Facebook cofounder Mark Zuckerberg was spot on when he said in 2010: “People wait until late in their career to give back. But why wait when there is so much to be done?” He followed that up in November when he and wife Priscilla Chan celebrated the birth of their daughter by announcing they would donate 99 percent of their Facebook shares over the course of their lives.
Indeed there is much to be done. More than a billion people globally live in extreme poverty, according to the World Bank. Each year 2.6 million children die of hunger-related illnesses, while millions of others lack education, clean water, shelter and other basic necessities. The world still needs cures to a plethora of diseases, while protecting the environment is also becoming more urgent, among a string of other social concerns that require funding.
In the Gulf, Saudi billionaire Prince Alwaleed Bin Talal and the UAE’s Al Ghurair family are leading the way with personal philanthropy. Last year, Prince Alwaleed promised to donate his entire $32bn fortune during his lifetime.
Abdullah Ahmad Al Ghurair pledged one third of his company’s assets in perpetuity to establish a regional education foundation, with an initial $1.1bn to be directed to the fund in the first ten years.
They are incredibly generous gifts, and by no means are they the only Arabs who are making such pledges. But still too many ultra-wealthy, in the Middle East and globally, cling onto their excess cash.
Some have their defences for doing so, such as Mexican telecoms magnate Carlos Slim, who argues that he can do more with his $47bn (as at January 13, according to Bloomberg), by using it to re-invest and create more jobs, than he could by giving it to charity. Jobs, he argues, are at the heart of poverty; an employed person should be able to provide themselves with all they need rather than relying on handouts.
He has refused to sign the Giving Pledge based on this argument. However, he has been far more generous with his philanthropy in recent years, although critics claim it is only to improve his image as he fights against regulatory changes being considered that would wipe out a significant amount of his wealth.
Others are criticised for pledging only to give away their money when they die — a contribution that US chemicals billionaire and philanthropist Jon Huntsman describes as being hollow. “What they’re really saying is: ‘If I could live forever, I wouldn’t give any of it away’,” he said several years ago.
There is no end to the luxury goods that money can buy, from superyachts (the most expensive of which we reveal on pages 52-53) to watches, and the majority of wealthy people have worked incredibly hard to earn their money. But there is surely a point where one reaches excess.
Warren Buffett, the most successful investor and also arguably the most selfless philanthropist in the world (while the $25bn-plus he has already given away falls slightly short of Bill and Melinda Gates, he has ironically given it to their foundation, with his name appearing on no buildings or ceremonial plaques), illustrates my point succinctly.
“The truth is, I have never given a penny away that had any utility to me,” Buffett told a room of high net worth individuals when he received a Lifetime Achievement Award for Philanthropy in 2013.
Buffett and Gates have not only led the way, but they have encouraged almost 200 other billionaires to follow suit, through the Giving Pledge, which they launched in 2010.
Mo Ibrahim, number 50 on our rich list, is the only Arab to sign up. While I am not suggesting that signing the Giving Pledge is the only indication of a person’s dedication to philanthropy — far from it — the Sudanese businessman attempted to explain the lower level of philanthropy in some parts of the world during an interview with development website devex.com in October.
He said many rich tend to hold a belief “that the state should deal with the least privileged” and they prefer to direct their wealth toward their family members or local community. “No, philanthropy is giving to people you never met in your life,” he argued.
“When they wrap you, you cannot take your Amex or Visa with you, so what’s the point?”
Quite right. There is no one way to donate or to rate a philanthropist, and many who do donate, do so silently. But it’s clear that many more millions could be put to good causes, including in this region. Let’s hope, for the sake of all humanity, philanthropy becomes more of an automatic expectation than a trend.