- The Washington Times - Tuesday, July 4, 2006

The news that Warren Buffett, the second richest man in the world, has donated most of his vast fortune to a foundation set up by Bill Gates, the richest man, has been greeted variously with much tut-tutting from some quarters and with cheers from others. It all depends on the political lens through which you view Mr. Buffett’s bequest, which the two billionaires hope will help find cures for the world’s most prevalent fatal diseases. The right way to look at this is as a grand moment in the annals of philanthropy.

If you are among those who believe that it is the duty of government to be all things to all men, then you are also likely to be among those who consider this a shameful moment, which shows up Washington’s failure to tackle big humanitarian issues. Often criticized for stinginess in foreign aid, the Bush administration and the Republican Congress are again taking it on the chin. Look, things have come to such a pass that private individuals have to pick up where government has failed, the argument goes.

If, however, you believe that the best kind of government is limited to core functions and that private sector initiative is far better equipped to tackle social or economic problems, you will be among those who have cheered. Entrepreneurs like Messrs. Buffett and Gates have a demonstrated their ability to be flexible and innovative in their approach to solving the vast undertaking they have named. Success in the competitive world of business has superbly equipped them for this undertaking, which could benefit billions of people in poor countries. What a legacy to leave.

(This in not to say that one would approve of all their projects. Both have also donated money to Planned Parenthood, some of which, therefore, also supports abortion clinics. It could certainly be better spent supporting adoption programs, for instance.)

The magnitude of the two men’s fortunes means real potential for inroads against diseases like malaria, tuberculosis, HIV/AIDS, etc. Out of his $44 billion in shares in the Berkshire Hathaway holding company, Mr. Buffett has given $31 billion to the Bill & Melinda Gates Foundation, which already has $30 billion in assets. For the sake of comparison, the American Red Cross has an annual budget of $3.4 billion, United Way of America $3.8 billion and UNICEF $2.7 billion. And not to forget the annual U.S. budget for Official Foreign Assistance hovers around $15 billion.

Mr. Buffett’s spectacular act of generosity is true to the nature of the American spirit. U.S. foreign aid is far more likely to come from private sources than is the case in other countries. Americans have a culture of giving, which extends not just to their local communities, but also to international causes and disaster aid. We saw another spectacular example of this generosity in the private response to the Indian Ocean tsunami disaster during Christmas 2005, when close to $1 billion was donated by ordinary Americans through just about any venue they could find.

It is a point that is worth repeating as the United States time and again finds itself castigated in international fora for stinginess in its foreign aid accounts. Time and again, U.S. diplomats are therefore on the defensive. Organizations from the United Nations to the Organization for Economic Cooperation and Development have rather arbitrarily decreed that every country should contribute 0.7 percent of its Gross National Income to foreign aid, a measure by which all countries, with the exception of the Scandinavia, fall short.

By this standard, the United States looks positively stingy with just 0.17 percent of the U.S. GNI devoted to foreign aid, despite the fact that due to the size of the U.S economy it is a considerable amount of money. And, if you include private donations — as you should — the picture changes completely. According to the Index of Global Philanthropy published by the Hudson Institute, private giving accounts for 70 percent of total U.S. foreign assistance of about $100 billion a year, coming from corporations, foundations, voluntary organizations, universities and colleges, religious organizations and individual remittances. According to Carol Adelman of the Hudson Institute, who has done groundbreaking work in this area, private donations from the United States exceed official foreign assistance from all other nations combined. These calculations do not even include the Buffett donation.

Now, we cannot all be mega-billionaires, but we can all find a worthy cause to support, whether here at home or abroad — as is the American way. The good news is that we can all make a difference.