Mark Zuckerberg's recent pledge to give away his huge fortune follows in a long-standing American tradition. Here's a brief history of wealthy philanthropists:
Who were the first philanthropists?
Wealthy individuals have been spending large sums on good causes for centuries, but it wasn't until the Gilded Age of the early 20th century that modern philanthropy as we know it began. The rise of industrialism had created a major wealth divide between the workers at the bottom and the so-called robber barons at the top. In a bid to address this imbalance — and perhaps to improve their reputations as they approached the end of their lives — several of the wealthiest industrialists chose to give away almost all of their fortunes. The movement's pioneer was Andrew Carnegie, the Scottish-born businessman who became the richest man in the world after selling his steel company in 1901. Carnegie believed that successful entrepreneurs were morally obligated to spend their fortunes helping others. As he put it in "The Gospel of Wealth," an 1889 article that became a guiding philosophy for philanthropists: "He who dies rich, dies disgraced."
What did he do with his wealth?
By the time he died, in 1919, Carnegie had given away more than 90 percent of his fortune — over $350 million, equivalent to $4.8 billion in inflation-adjusted money, to hundreds of causes. He built more than 2,800 public libraries; founded what is now Carnegie-Mellon University in Pittsburgh, one of the world's leading research universities; and spent millions constructing New York's Carnegie Hall and other concert venues.
Who were the other early philanthropists?
Carnegie's successor as the richest man in the world, John D. Rockefeller, followed his lead. The self-made oil magnate's total assets peaked at $1.4 -billion — equivalent to $30 billion in today's money. Under the broad mission statement of promoting "the well-being of mankind throughout the world," Rockefeller's donations and foundations helped build the University of Chicago; funded medical programs that led to vaccines for meningitis, yellow fever, and other diseases; and built major schools of public health at Johns Hopkins and Harvard. Other large-scale philanthropists included automaker Henry Ford, who created America's largest charitable foundation, and industrialist Jean Paul Getty, who set up the wealthiest art institution in the world. Though the goals of each philanthropist differed, says Mark Dowie, author of American Foundations, they shared similar motivations: "guilt, narcissism, paternalism, the wish for immortality…and a love of humanity."
Is that still true?
No doubt. Indeed, modern philanthropists have matched and perhaps exceeded their predecessors in both ambition and scale. Bill Gates, the Microsoft founder who became the richest man in the world (current estimated worth: $79 billion), set up the Bill & Melinda Gates Foundation with his wife in 2000. Gates has already donated $28 billion to the foundation, and persuaded the second richest man in the world, investor Warren Buffett, to gradually donate 85 percent of his own estimated wealth of $66 billion to the organization. The Gates Foundation now has a $45 billion endowment — more than the Rockefeller, Carnegie, and Ford foundations combined. The Gates Foundation's funds are distributed to a wide range of charitable programs, but its main focus is on improving health care in poor countries. Its billion-dollar vaccination programs have helped eradicate polio across most of the developing world and reduce measles deaths by 90 percent, tuberculosis by 45 percent, and malaria by 30 percent. "American philanthropy used to be all about giving locally," says Anne Petersen, president of the Global Philanthropy Alliance. "But there's been a dramatic trend toward international giving, and that's only going to continue."
Have others followed Gates' example?
They have — many at his personal behest. In 2010, Gates and Buffett convinced 38 other billionaires to join them in signing the Giving Pledge, a nonbinding promise to give away at least half of their wealth to good causes. That list has now grown to 141 billionaires from 16 different countries, worth a cumulative $800 billion. Of course, not everyone has accepted Gates and Buffett's overtures. "Maybe I should write a book on how to get by on $500 million," joked Buffett in 2013. "Because apparently there's a lot of people that don't really know how to do it."
What about Zuckerberg?
He and his wife pledged to use 99 percent of their Facebook shares — worth $45 billion — for good causes. The 31-year-old is one of several young tech billionaires with their own foundations; others include Sean Parker (Napster), Pierre Omidyar (eBay), and Dustin Moskovitz (Facebook). This new wave of philanthropy hasn't been entirely uncontroversial, with critics questioning whether it's anti-democratic for a handful of super-rich people to have such power to set policy and reshape the world. But the philanthropists are unapologetic. "All this money is going for charity to help people," reasoned Home Depot founder and Giving Pledge signatory Bernard Marcus. "Would they rather we bought yachts and built mansions?"
Serving society, not his workers
Andrew Carnegie may have been the pioneer of modern philanthropy, but his generosity was by no means universally appreciated. Conditions in the steel magnate's Pittsburgh mills were awful even by 19th-century standards: Employees worked 12 hours a day, six days a week, with just one holiday a year (July 4); the work was so grueling that most workers had to retire by age 40. So when Carnegie chose to give his profits away, rather than raising his impoverished workers' pay, labor leaders and clergymen were furious. Methodist bishop Hugh Price Hughes denounced the industrialist as "an anti-Christian phenomenon, a social monstrosity, and a grave political peril." But Carnegie flatly rejected such criticism. "Trifling sums given to each [worker] every week or month," he said, "would be frittered away…upon richer food and drink, better clothing, more extravagant living, which are beneficial neither to rich nor poor." He argued that by keeping profits high, he had more money with which to serve society in areas — libraries, education — that were being ignored or neglected by the government. His workers didn't accept that logic. "What good is a book," they asked, during the famous Homestead Steel Strike of 1892, "to a man who works 12 hours a day, six days a week?"