Billionaire Philanthropy: A Broken Band-Aid?

Charity, power, and who gets to define “good”

Introduction

In recent years, philanthropy has taken on a new kind of visibility. Billionaires pledge to give away fortunes, headlines celebrate massive donations, and movements like “Effective Altruism” encourage giving not just generously, but strategically.

At first glance, it’s hard to argue with any of this. Private donations can fund vaccines, support education, fight climate change, or reduce suffering in ways governments sometimes don’t.

But as private giving grows, so do the questions. Who decides which causes matter most? How much influence should a small group of ultra-wealthy individuals have over global priorities? And does the current system of philanthropy help fix inequality, or quietly reinforce it?

This post looks at those questions, and at the tensions that arise when private wealth is used to shape public outcomes.

Billionaire Philanthropy

Let’s say you’re not intrinsically opposed to billionaires. Maybe you even like a few of them. Maybe you admire the ones who seem to care about big problems: climate change, poverty, criminal justice. Maybe you think philanthropy can do real good in the world.

Still, even if you’re not out to “eat the rich”, there’s a nagging question that’s hard to shake: should billionaires have this much power over how the world changes?

Even when their intentions are good, the structure of billionaire philanthropy raises serious red flags. As philosopher David Thorstad points out, back in the 19th century, some governments were so wary of the influence of the super-rich that they actively restricted the creation of philanthropic foundations. Why? Because these institutions weren’t democratically accountable. They allowed a handful of people to wield enormous influence behind the scenes; without elections, without public scrutiny, and without limits.

Today, those fears seem increasingly relevant. Thorstad warns that without any expiration date, philanthropic foundations can quietly accumulate power for decades. And since these foundations aren't answerable to the public, they can divert attention from systemic issues like tax avoidance or the fact that wealth taxes remain embarrassingly low. In effect, they let billionaires shape public life while sidestepping the responsibilities of democratic oversight.

Defenders of billionaire giving, like popular ‘Effective Altruist’ blogger Scott Alexander, offer a different perspective. They argue that the worry is overstated. After all, billionaire giving is tiny compared to government budgets.¹ In 2024 the US federal budget was almost $7 trillion, while the top 50 donors clocked in at $16 billion: a 400x difference.²

Furthermore, the argument goes, private philanthropy can help where government policy fails. If a billionaire donates to highly impactful charities (e.g. animal welfare or global poverty), that can actually be way better than having their money taxed and channeled into less impactful (or even harmful) government programs.

The Problems with Private Power

But even if we accept that some billionaire donations do genuine good, the structural concerns don’t go away.

First of all, philanthropy can act as a social pressure valve. It can help relieve the rich of the moral and political pressure to support higher taxes, better labor conditions, or more climate-friendly policies. It’s an easy out to say “I’m already giving millions to charity, what more do you want?”
In the US, where over a quarter of the world’s billionaires live, tax deductions for charitable giving already help the wealthy reduce their tax burdens, effectively giving them public subsidies to pick their own favorite causes.

Also, while billionaire giving may be small compared to the US federal budget, it’s still enormous in absolute terms, especially considering how few people are making those decisions. Around 900 American billionaires (mostly older, white men) control billions of dollars in philanthropic capital every year — money that can shape public life in ways most citizens will never be able to match. The 10 richest alone have more than $1,700,000,000,000, with the wealth (and number) of billionaires growing rapidly:

One could object that the total wealth is also growing. So maybe this is the wrong metric, maybe we should instead examine what percentage of total wealth the billionaires control, and whether that’s increasing:

• In 2024, US billionaires held $6.72 trillion out of $160 trillion in total US household wealth, so about 4%

• In 2010, US billionaires held $1.4 trillion out of $56 trillion, so about 2%

• In 2000, they held about half a trillion out of $44 trillion, so about 1%³

This aligns with broader trends of the ultra-wealthy capturing an ever-larger share of income and wealth:

Implications

We’ve seen billionaires use this wealth to buy politicians and votes and social media platforms, which is all pretty bad for our political landscape. But if we restrict our view to just philanthropy, is it still bad?
Well, think about the power dynamics here. The vast majority of Americans, if they donate at all, can maybe give a few hundred dollars a year without getting into financial problems. In a nation of 342 million people, having about 900 individuals hold such a huge influence over the nonprofit sector is hardly a recipe for fairness. And as wealth inequality grows and non-profits become more reliant on big donors, the power imbalance could get even more extreme. It’s not just that these billionaires have more money, it’s that their money buys them a louder voice in shaping what problems matter and how they should be solved.

Okay, but if billionaires donate to less corrupt and more impactful charities, this might actually be a good thing, right? Well unfortunately, a lot of that money goes to things like: elite universities, personal art galleries, vanity projects, and other less than stellar causes. People who analyze the impact of various charities, like the “Effective Altruists”, don’t have a structural way to ensure money flows to the most impactful/least corrupt ones. They are, by and large, at the mercy of the people who hold the purse strings.

Defenders of billionaire philanthropy might point out that there are also billionaires that do donate to effective charities. As journalist Dylan Matthews put it in his article “If you’re such an effective altruist, how come you’re so rich?”:

we will live in a world of extreme wealth inequality for the foreseeable future, and the best we can likely hope for is that the winners in that rigged game donate their winnings justly.

I think that even if we accept the premise that Effective Altruists are uniquely good at picking out important causes, this argument doesn’t work…

Effective Giving in Practice

Some of you might believe that billionaire philanthropy can be a force for good. But ask yourself: is it currently? Are ultra-wealthy donors really committing to “effective charities”?

As of now, there are around 3,028 billionaires in the world. Of those, only four have publicly committed to donating their wealth according to Effective Altruist (EA) principles. Yes, four. Despite all the media attention and philosophical arguments, EA-style giving hasn’t exactly taken the billionaire world by storm.
Defenders might counter that this number will likely grow. One effective altruist estimates that we’ll have two more EA billionaires by 2027. That’s a lot of extra money, but still only a teeny tiny percentage of billionaires.

Of course, philanthropy isn’t limited to billionaires. There are also plenty of wealthy individuals who haven’t hit the ten-figure mark but still want to give meaningfully. The wealthy that want to direct their accumulated capital toward effective giving could make use of one of the most prominent EA-aligned platforms: Founders Pledge.

Founders Pledge encourages entrepreneurs to commit a portion of the money they make (when selling their financial assets or businesses) to charity. It’s legally binding and grounded in EA values. But despite its intentions, the numbers aren’t as bold as you might expect. The minimum pledge is only 5%, and the Founders Pledge claims the average is around 10%. There is, however, a catch: if the entrepreneur never exits their business or liquidates their shares, the pledge doesn’t kick in. In that case, nothing is owed. Hmmm.

Also, “The pledge is a commitment to give to any nonprofit(s) of your choice, anywhere in the world”, which includes your own nonprofits. Founders Pledge does actively advise donors on where to give, which they use to promote “effective charities”, but this is just advisement and may be ignored.

So far, Founders Pledge claims to have secured about $10.8 billion in pledged donations, of which $1.5 billion has already been disbursed. That’s no small feat. But to put it in perspective: the top 50 US donors alone gave more than $16 billion to charity in 2024. So, a portion of the billionaire giving, of one country in one year, outstrips the entire amount ever pledged through Founders Pledge.

And perhaps more strikingly, Founders Pledge hasn’t attracted the world’s richest. That title belongs to a different initiative: The Giving Pledge, founded by Bill Gates and Warren Buffett.

The Giving Pledge

At first glance, this seems like an EA dream. In fact, EA philosopher Peter Singer once called Gates, Buffett, and Melinda Gates “the most effective altruists in history.” But a closer look reveals some big differences.

Unlike Founders Pledge, The Giving Pledge isn’t legally binding. There’s no enforcement mechanism, no guarantee that the promised money will ever be donated. And while Founders Pledge provides recommendations grounded in impact research, The Giving Pledge doesn’t advise donors on how to be effective. It simply encourages donors to support causes that “inspire them personally” and “benefit society” (however they choose to interpret that).

Yes, the bar is higher in terms of scale, pledgers commit to giving at least 50% of their wealth. But they can do that in any way they like. EA principles —like cost-effectiveness, transparency, and long-term impact— are nowhere to be found in the official guidance.

While the Founders Pledge has about 2000 signatories, most of them are far less wealthy than the 240 signatories of The Giving Pledge, who include names like Elon Musk, Sam Altman, Mark Zuckerberg, Bill Gates, and Warren Buffett. Combined, these individuals control trillions of dollars.⁴ That’s the kind of capital that could change the world if it were used wisely.
Unfortunately, we don’t know much about how it’s being used. The Giving Pledge doesn’t disclose where signatories donate, what causes they prioritize, or whether they’ve followed through. Instead, it hosts private annual gatherings and smaller events for donors, their families, and staff.

Even Peter Singer expressed concern about how vague the pledge was, pointing out that it could easily include things like building opera houses named after donors. When he asked why the pledge didn’t focus more on helping the global poor, he was told that adding such requirements might reduce the number of people willing to join. Singer accepted that explanation and praised the effort for “changing the culture of giving.”
Pardon? Singer, I thought we were supposed to care about transparency and, you know, effectiveness? Imagine if EA dropped the “effective” part of its philosophy just to be more popular. Isn’t this defeating the whole point? As philosopher Maxim Vandaele put it:

the fact that The Giving Pledge – which is not legally binding, gives signatories near unlimited control over their donations, and appears to care little about ensuring the transparency or effectiveness of donations – has apparently convinced a far greater number of far richer philanthropists than the more clearly effective altruist Founders Pledge has, should have us strongly question the feasibility and desirability of billionaire philanthropy, even from an effective altruist point of view.

So What’s the Alternative?

I’ve talked a lot about the drawbacks of billionaire philanthropy, but I haven’t spent any time defending government programs. It could be that billionaire donors are still better because state institutions are even worse. But even if we grant that, it’s still worth asking: how realistic is it to expect the ultra-wealthy to consistently act in everyone’s best interest — especially without any democratic oversight?

Effective Altruism prides itself on being open to any means that can do the most good. That should include rethinking the basic structures through which we distribute wealth and make collective decisions.⁵ For example, even if government programs do turn out to be worse, why should we assume our only options are either philanthropy or traditional government programs? There are other models too: citizens’ assemblies, participatory budgeting, or referendums on major spending priorities. Those approaches give ordinary people a voice in decisions about shared resources.

The idea of significantly raising taxes on billionaires to fund these kinds of redistribution programs may seem politically far-fetched. But relying on a handful of billionaires to voluntarily give away their fortunes wisely and fairly? That’s even less probable. We have many, many options before us, and we can do so much better than billionaire philanthropy.

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A huge thanks to Maxim Vandaele for helping with this post. All opinions and mistakes are my own.

1. Well… some government budgets.

2. Scott used the 2018 numbers which were: a US federal budget of $4 trillion, and billionaire philanthropy of $10 billion. Still a 400x difference, though it should be noted that the number of billionaires is rapidly growing. Back in 2018 the US had 585 billionaires while in 2024 it was 813, so comparing data from the top donors is likely to underestimate things.

3. These numbers are estimations and if you ask different sources you’ll get slightly different answers. However, they all agree that it’s rising, which is the relevant point. For the ‘half a trillion’ I had to estimate it because there isn’t precise data available. There were approximately 298 US billionaires at that time, or about 63% of the global total. Forbes reported that the global billionaire wealth in 2000 was approximately $898 billion. So we can estimate that US billionaires had about half a trillion.

4. And also commit crimes at an alarming rate.

5. If billionaire dominance over public life is a problem in society at large, it’s a problem inside EA too. A small circle of ultra-wealthy donors and their advisors currently shapes much of the field: setting research agendas, funding norms, and long-term strategies. As Carla Cremer put it:

Having a handful of wealthy donors and their advisors dictate the evolution of an entire field is bad epistemics at best, and corruption at worst.

Others in the EA community have warned that this dependence comes with hidden costs. Writing under the name ConcernedEAs, a group of insiders pointed out that EA is subtly shifting toward the political, philosophical, and cultural views of its biggest tech donors. And with that shift comes a quiet narrowing of priorities — away from issues like workplace democracy or wealth redistribution, and toward topics that are more comfortable for billionaires, like AI risk or space colonization.

(To be clear: those latter issues may still be worth working on. But when an entire movement begins to mirror the worldview of its funders, we should question whether it’s still free to ask the hardest, most uncomfortable questions)