The Social Network of Giving

Cynicism abounded in September when Mark Zuckerberg, the co-founder of Facebook, announced a $100m donation to improve education in Newark just in time for the launch of The Social Network, a movie about the networking website that does its best to portray him as a money-obsessed double-crosser. Whilst there is a long tradition of the wealthy using philanthropy to repair a battered reputation, this gift, trumpeted on the Oprah Winfrey show, seemed particularly blatant, said the sceptics.

Undeterred, Mr Zuckerberg has now declared his intention to take his philanthropy to an entirely different level, promising to give away at least half his wealth (currently estimated at well over $5 billion) by signing the Giving Pledge launched this summer by Bill Gates and Warren Buffett. Inevitably, the sceptics soon pointed out that this announcement coinided with a new lawsuit being launched by the Winklevoss twins, who featured in the movie as alleged victims of intellectual property theft by Mr Zuckerberg.

Nonetheless, by recruiting Mr Zuckerberg, Messrs Buffett and Gates have demonstrated that their Giving Pledge has appeal to the wealthy of every generation. Mr Zuckeberg is only 26 years old. “People wait until late in their career to give back. But why wait when there is so much to be done?” said Zuckerberg in a statement about his new promise. “With a generation of younger folks who have thrived on the success of their companies, there is a big opportunity for many of us to give back earlier in our lifetime and see the impact of our philanthropic efforts,” he said.

Not that Mr Zuckerberg is the youngest pledgemaker: that honour goes to fellow Facebook co-founder Dustin Moskovitz, born a couple of months later and the youngest person on the annual Forbes list of billionaires.

Apparently, Mr Zuckerberg played an important role in convincing Mr Moskovitz to sign the pledge. The latest batch of signatories also includes several of the early investors in Bloomberg Plc, recruited by the media firm’s eponymous founder, New York mayor and prominent philanthrocapitalist Michael Bloomberg. Indeed, the whole exercise is an effort in old-fashioned social networking, creating a club people want to join and using peer pressure to get members to behave appropriately.

The recruitment phase seems to have built up a considerable momentum, and many more billionaires are likely to sign the Giving Pledge in the coming year. There are two big unknowns. First, will there be progress on the appropriate behaviour front? Currently, all that is asked of those signing up to the giving pledge is the promise to give away half their wealth. But the essence of the approach to giving taken by Mr Gates and other leading philanthrocapitalists is that giving should be thoughtful and make a real difference. The hope is that once a billionaire has committed to the Giving Pledge, the conversation will soon turn to how that giving is being done and whether it is effective or can be made so. The sooner that conversation begins, the better.

Second, will the effort to take the Giving Pledge global succeed? When Messrs Buffett and Gates visited China recently, they received a decidedly mixed reception, with many of the country’s new wealthy making themselves scarce. In March, the two billionaire missionaries of philanthrocapitalism will go to India, where thanks to the country’s more established philanthropic traditions they expect to receive a more enthusiastic reception. Indeed, Mr Gates believes that India could soon be the world’s second most philanthropic country, after America. Well, that is something to wish for in 2011.