Gongol.com Archives: December 2024
December 11, 2024
Andrew Carnegie famously donated an enormous fortune to the construction of more than 2,500 free public libraries around the world, the majority of which were built in the United States. Carnegie's library campaign comprised one of the largest philanthropic gifts in history, when adjusted for dollar value, and it would be hard to imagine the consequential value of that gift. Free public libraries are treasured institutions that have the potential to create enormous welfare benefit for individuals and for society as a whole. ■ The philanthropic choices of wealthy people have always attracted great attention. And the inevitable question that must be weighed is: Can wealth do more good now, or should it be endowed for future use? ■ That's an especially challenging question, philosophically, because the kinds of people who accrue enormous wealth generally show a predisposition to delay gratification and a strong belief in the power of compounding. In the words of Warren Buffett, you want to build a snowball by finding a lot of snow and a really long hill. ■ But it's hard to ensure that a foundation designed to do philanthropic work (like giving away an enormous personal fortune) will remain true to its founders' intentions -- or that it will adapt appropriately as times change. What might have been a good charitable cause in 1924 might be entirely outdated in 2024. ■ Thus it is interesting to note the choice of the Kiewit Foundation, a philanthropy established on $150 million donated in 1980, to wind itself down by its 50-year mark, giving away $500 million in remaining assets in an enormous blitz. ■ The Kiewit Foundation has focused mainly on causes in and around Omaha, and some of its beneficiaries have relied a great deal on its support, so the transition could prove difficult for some. But on the larger scale, it's probably best for the wealth to be put to work sooner rather than later, since, like Carnegie's public libraries, the real benefit isn't in the first-order spending but rather in the second-order consequences of the spending that then leverage future possibilities. ■ In the Carnegie case, society benefits directly from having the books, but it benefits even more from the human potential that is unleashed or expanded by those books. In the Kiewit case, it's still to be determined which investments will take up the balance of what is to be distributed. But if they spread the investments around among a reasonable number of well-considered possibilities (say, perhaps, two dozen or so), and if good management is involved at the non-profits who get the funds, then even if a few of the initiatives turn out to be duds, at least a few of the remainder ought to be big enough victories to make the investment a permanent inflection point for the community overall.
