By John S. Davis
Around the dinner table recently, we were discussing the “outrageous” level of compensation among corporate leaders. It had just been announced that Lloyd Blankfein, chairman and CEO of Goldman Sachs Group Inc., was expected to receive a $25 million bonus on top of his $19 million annual salary.
A family member asserted that the accumulation of wealth and power in fewer hands is damaging our global society. He averred that the econom-ic chasm is widening between the haves and the have-nots, accentuating the differences among people of the world rather than bringing those people together.
My response was that such accumulation is not inherently bad. It can be good, when it is present in a truly philanthropic life.
Such a life is by no means rare in our society. I was amazed when I read recently of the Bill and Melinda Gates Foundation’s intent to give all its money away no later than 50 years following the death of its longest-serving trustee. The foundation – with assets of more than $32 billion and a pledge from Warren Buffett for $31 billion more, is doing good all over the world. It has used its resources globally to initiate programs aimed at improving health and economic development, and in the United States to improve education and increase access to technology in libraries.
We have no idea what Mr. Blankfein does with his money – and it’s really none of our business. Free enterprise – the ability to enjoy the fruits of our labors – is basic in our society. We can only hope that he is as generous giving it away as he is successful in earning it.
The family member who complained about “greedy” corporate leaders said someone should rein in “excessive” compensation. No mention of who, or what standards should be used.
The fact is, the rest of the world’s perception of the United States as stingy is wrong, according to Arthur Brooks, associate professor of public administration and director of the nonprofit studies program at Syracuse University. In an address last year at the Heritage foundation in Washington, D.C., he cited data that show that Americans are significantly more generous than citizens of other countries.
Brooks said that 70 percent of American households make charitable contributions. On average, they give $1,800 per year, or 3.5 percent of their income. This amounts to about $180 billion. Foundations, bequests and corporations add $60 billion, for a total of more than $240 billion in charitable contributions annually in the United States.
Critics say Brooks’ figures are skewed because givers in the U.S. receive a tax break for their contributions. A tax deduction certainly makes giving easier. However, a tax deduction is never equal to the donation. Whether 100 percent or 72 percent of the donation is altruistic is not the point. American still are extremely generous with their money.
We Americans give generously of our time and money. We do live philanthropic lives. Because of such generosity, our communities are better places to live.