In a private initiative that could "double or triple the amount of philanthropy in America," two of the world's richest men are employing what some call "peer pressure at its best" to persuade their fellow billionaires to give at least half their money to charity. Here's a quick guide to their push:
What is "The Giving Pledge"?
It's an idea that was hatched by Microsoft founder Bill Gates and Berkshire Hathaway founder Warren Buffett over lunch at an Omaha diner. Buffett has already annouced that he will donate 99 percent of his $47 billion fortune to charity, with the bulk designated for the Bill and Melinda Gates Foundation, an organization Gates and his wife established to fight global poverty and disease.
Have they tried convincing their fellow billionaires yet?
Last May, Gates and Buffett made a "donate half your wealth" pitch to some fellow super-rich individuals — including New York Mayor Michael Bloomberg, former cable mogul Ted Turner, hedge fund guru George Soros, and Oprah Winfrey — in a confidential meeting, hosted by David Rockefeller, in New York City. Some have called the gathering the "first supper." (Watch Warren Buffett discuss his charity plan)
In theory, how much money could they raise?
If the rest of the Forbes list of America's 400 wealthiest individuals half their combined $1.2 trillion net worth, the effort would raise more than $600 billion. That's twice the annual amount all Americans currently donate. "If we would be able to get this influx for philanthropy from billionaires, it would inspire other Americans," says Melissa Berman, president of Rockefeller Philanthropy Advisors, a non-profit that has advised the Gates Foundation on the project, told Bloomberg News. "And then we could really change what the world is like."
Will billionaires go along?
Only time will tell, but their tax returns suggest The Giving Pledge may be a hard sell. According to the IRS, the 400 biggest tax payers earned a total adjusted income of $138 billion in 2007, and claimed about 8 percent of it — or $11 billion — in charitable deductions. Dying does not necessarily increase one's generosity: Only 12 percent of the assets from 38,000 estate filings in 2007 (or about $28 billion) was designated for charity.
How do Gates and Buffett hope to get people to donate?
One "carrot" will be an invitation to an annual "Great Givers" summit, where the billionaire donors would trade ideas on how to get the most bang for a charitable buck — a question to which Buffett and the Gates have devoted much thought. But the big hope is that others will follow Warren in leading by example: In his public pledge, posted on Fortune's website, Buffett said he's only keeping 1 percent of his fortune because that's all he and his family need. "Neither our happiness nor our well-being would be enhanced" by keeping more, Buffett said.