Philantrophy or how to properly give your wealth away

A few weeks ago, Warren Buffet - one of the wealthiest men in the world; in fact the 2nd richest American after his friend Bill Gates - donated $31 billion to the Melinda and Bill Gates Foundation. While this is not all cash but mostly shares of stock of Buffet"s holding company, and will be donated over a period of years, this is still the largest donation ever made in the U.S.A. - or even the world. As an addendum, Buffet also donated $7 billion to the Buffet Foundation which is run by his children.

There is a clear message and lesson from this act of Warren Buffet on the proper way of donating one's wealth, and these are: that he will not spoil his children and will only leave them so much money; that he will donate to Foundations that can really perform their task well and will have continuity; that it will have a contagion effect that will encourage other donors to give to the same foundation. The Bill and Melinda Gates Foundation is a well run, staffed with professionals with preference to medical and humanitarian projects, especially in underdeveloped countries. And in all likelihood, Bill Gates will donate most of his wealth to this Foundation when the time comes.

In the Philippines, almost all the big businessmen or taipans have already set up Foundations. There is the Metrobank Foundation of George Ty, the Alfonso Yuchengco Foundation, the Tan Yan Keng Foundation of Lucio Tan and others. This is a good development as it shows that our wealthy businessmen are concerned about the greater society and will help. Aside from the awareness that "you cannot bring it with you," it is also the realization that great wealth entails great responsibilities.

In recent years, there has been an examination of the amount of Foundation funds that eventually goes to the beneficiaries. This was because, in some instances, the bulk of the Foundation funds went to operating expenses and the overhead of the Foundation, and very little to the eventual beneficiaries. With the advent of reforms in most Foundations, the benchmark is now, 25% for operating expenses and overhead, while 75% to the beneficiaries. It would be best if more percentage will go to the beneficiaries. In fact, in two small Foundations that my wife and I are involved, the St. Expeditus Foundation and the Mission for the Deaf Foundation, dedicated to underprivileged children and deaf children, 90% to 95% of the funds gets to the children. There is a tendency for large Foundations to overspend for administrative and operating expenses, but as long as it is within the 25% limit, this is justifiable as their programs have bigger and longer social effects and implications than the simple donations that we give to the needy through radio and TV stations.

Donations of all kinds and types are always commendable and should be encouraged as it is a redistribution of wealth that every society needs to do to alleviate the skewed wealth distribution in any form of government, democratic or totalitarian. The only imperative is that most of the donation should really reach the intended beneficiaries and attain the objective of the donor.

* * *

With the SONA of Pres. Arroyo, I cannot help but comment on the current political situation in the country. It seems to me that the reason PGMA is always looking like the better alternative to any of the opposition, is the inability of the opposition to get their act together. Having Erap and Imee Marcos criticize PGMA is surely not the most credible situation. Escudero has also lost his appeal, and the leftist group has been repeating the same issues. The opposition has been completely outmaneuvered in the political gamesmanship, as illustrated in the SONA presentation. They do not have the strategy and the tactics of a worthy opposition.