Warren Buffett's Billionaires Show Why Charity Trumps Government

It’s not hard to conclude that the Democratic Party is becoming hostile to charity.

By + More

Big news recently in the charity world: At last count, 38 billionaires signed the "Giving Pledge," in which they promised to donate at least half of their fortune to charity either during their lifetime or upon their death. The list includes such business leaders as David Rockefeller, Barron Hilton, Michael Bloomberg, Diane Von Furstenberg, and Barry Diller. All stepped up after being personally asked by fellow billionaires Bill and Melinda Gates and Warren Buffett, who themselves already give away about $3 billion a year. (Buffett has pledged to give away 99 percent of his money. His 2010 net worth is $47 billion.)

The British Guardian calls them the new "philanthro-capitalists," because their money, business instincts, and interest in innovation qualify them as "the world's leading problem solvers." And while these 38 billionaires may come from different industries supporting a variety of causes, it is their commitment to first making, and then giving, money away that unites them. They believe in free enterprise and capitalism.

That's what makes this such big news; some of these billionaires are big donors to the Democratic Party. Rockefeller, filmmaker George Lucas, CNN founder Ted Turner, Revlon's Ron Perelman, and Microsoft cofounder Paul Allen, to name a few, have all given plenty of money to liberal candidates or to the DNC.

[See a slide show of 10 celebrities who give big to Democrats.]

That's ironic, given that one of the central tenets of the Democrats is that government is usually the best solution to social ills. Liberals often believe that problems such as poverty, obesity, and crime are societal, and exist on such a wide scale that only government can solve them. Individuals can't really do as much, they believe, and so the best thing to do is rely on government action to create a more just and equal society.

One way to create more economic equality is through forced redistribution of income through taxes. Presidential candidate Barack Obama said that his top priority if elected would be to close the income gap by "disaggregating tax policy between the wealthy and the working class." Or, as he famously called it in his campaign conversation with Joe the Plumber, "spreading the wealth around."

Research shows that people who believe that government's top priority should be "spreading the wealth around" are far less likely to give money to charity. "For many people, the desire to donate other people's money displaces the act of giving one's own," writes Arthur Brooks, author of several books on charitable giving and head of the American Enterprise Institute. "For many Americans, political opinions are a substitute for personal checks; but people who value economic freedom, and thus bridle against forced income redistribution, are far more charitable."

In fact, Brooks' research shows that households headed by a conservative gave, on average, 30 percent more to charity than households headed by a liberal ($1,600 compared to $1,227). This is despite the fact that families headed by a liberal earned an average of 6 percent more per year than conservative families. Big-government liberals have a well-documented history of giving very little away to charity. (Both Vice President Joe Biden and then-Vice President Al Gore, for example, have gotten bad press for their lack of charitable donations over the years.)

It's becoming clear that there is a minority of Americans who don't give much money away—and they're the same small group who, when asked to choose between equality of opportunity and equality of income, choose the latter every time. For them, free enterprise takes a back seat.

As Brooks puts it, liberals are increasingly "tone deaf" to the fact that most Americans believe that the best way to solve problems is through individual, voluntary action at the local level, not through massive expansion of the government. When you combine their anti-business rhetoric with support for wealth redistribution, it's not hard to conclude that the Democratic Party is becoming hostile to charity. Just last week, for example, New York Gov. David Paterson, a Democrat, made life more difficult for local charities by cutting the tax deductibility of charitable donations for wealthy donors. That's the last thing government should be doing.