The Good Rich and What They Cost Us
- Robert F. Dalzell, Jr.
- Yale University Press
- 208 pp.
- Reviewed by Randy Cepuch
- March 25, 2013
Profiling personalities from colonial times to the modern day, this book explores the philanthropic leanings of the wealthy.
Legend has it that F. Scott Fitzgerald once said, “The rich are different from you and me” and Ernest Hemingway responded, “Yes, they have more money.” While that conversation never took place, Fitzgerald did, in a short story called “The Rich Boy,” write, “Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft, where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand.”
In The Good Rich, author Robert Dalzell suggests it’s not quite that simple. Just as there are various paths to attaining wealth, there are various approaches to handling money once it’s in hand. Dalzell profiles a small but fascinating handful of Americans — some famous, others largely forgotten — who by one means or another came to command huge fortunes and ultimately to give much of the money back.
Dalzell first looks at Robert Keayne, a merchant who imported goods from England to colonial Boston. He was accused of overcharging customers, although evidence indicates his profits were legitimate. In any case, even as Keayne grew rich he developed a strong conviction that wealth should be given back to society. He felt that making large donations during his lifetime would have been seen as trying to buy popularity, so he used his will to implement his philanthropic plans. That document elaborated on how the wealthy should give “a child’s part of our estates” (an amount equal to that left to each offspring) to God and country.
Some might believe that George Washington gave more than enough to his country without taking financial contributions into account. Partly because he had been rewarded by his grateful nation with vast land grants and partly because he had married Martha, a wealthy widow, Washington was one of the richest men of his time. When he died in 1799, his will listed assets then worth nearly $1 million ($100 million today). Throughout his life, Washington had wrestled with the thorny issue of slavery, and in his will he created the path for freedom of his slaves at Mount Vernon and advocated equal opportunities for everyone. His charitable bequests strongly emphasized education and provided the seeds for a national university in the nation’s capital — the school now known as George Washington University.
Uneasy feelings about exploiting fellow human beings no doubt also played a role when the Lawrence brothers, Amos and Abbott, of Boston, grew rich in the textile business early in the 19th century. They recognized that the raw cotton they purchased from southern plantations had been picked by slaves. Amos cited religious beliefs for his practice of assembling and handing out small packages filled with clothing and household goods, as well as books and coins, to whomever seemed in need. Abbott, on the other hand, tended to think bigger: his donations helped build the Boston Public Library.
Steel baron Andrew Carnegie liked the library idea so much that he built more than 2,500 of them around the world. The effort made Carnegie a very popular man — and it probably didn’t hurt that he looked a bit like Santa Claus, Dalzell notes in a chapter otherwise focused on John D. Rockefeller.
Like Keayne, John D. Rockefeller was accused of unfair business practices — in his case, deals with railroads that his competitors in the oil business could not match. There was no doubt Rockefeller was a ruthless businessman, but as his fortune grew he began donating to churches and schools and even individuals who wrote “begging letters” that Rockefeller often discussed with family members over dinner. As Mega Jackpot lottery winners know, once word is out that someone has money, he or she will hear from a lot of friends and strangers interested in a loan or gift. Dalzell reports that in a single day, Rockefeller received more than 5,000 entreaties delivered by boat from overseas.
Rockefeller’s most-favored recipient was Spelman College in Atlanta, a school for African-American women — reflecting the influence of his wife, Cettie, who was committed to wiping out slavery and helping former slaves start new lives. The next generations of Rockefellers preferred other projects, including the restoration of Colonial Williamsburg.
The Rockefellers are just one American dynasty, of course. When the Forbes 400 list of the richest first appeared in 1982, it included several du Ponts, for example. Three decades later, nearly 20 percent of the people on the list are related to other people on the list.
Warren Buffett’s a mainstay on the list, and for many years he said he thought the best way for him to give back would be to keep his money working throughout his lifetime and then give to charities in his will. But he changed his mind in 2006 and began giving shares in the conglomerate he controls, Berkshire Hathaway, to a foundation founded by his friends, Bill and Melinda Gates, whose goals include education and fighting disease. In 2010, Buffett and Gates asked fellow billionaires to pledge to give half their money to charity, and a year later the Forbes list began including an icon noting who had signed on. So far only about 10 percent of the names are accompanied by the pledge icon. Dalzell points out that some billionaires have been quietly making huge donations for many years, long before the pledge existed.
Pledgers cite reasons including gratitude for good fortune, family influences, the chance to see results, feeling indebted to society, the belief that having a lot of money isn’t good for a family and to show children the benefits of giving back. Religious reasons or guilt are rarely mentioned. The most popular beneficiaries are medical research and education — especially early schooling, with those givers often noting the role of education in their own success.
Not surprisingly, there are some colorful people on the list. CNN founder Ted Turner, for instance, says he made a promise long ago “to care for the planet Earth.” His best-known donation is probably the 1997 pledge of $1 billion he made to the United Nations (nearly paid in full at this point), but Turner has also directed donations to support nuclear disarmament, environmental programs, alternative energy, women’s rights, eradication of poverty and even painting parking lots white instead of black (to lessen heat retention and slow global warming).
In a time when many are talking about tax reform, it’s important to consider what will happen to certain charities if the tax deductions for supporting them are reduced or eliminated. While average Americans are more generous donating to religious and basic-needs charities than the rich are, Dalzell reports that most support for the arts, environmental causes, animal care, healthcare, youth and family services, and education comes from the rich.
Further, he notes that a very limited survey of the wealthiest Americans indicates that two-thirds would decrease their charitable giving if tax deductions disappear. That’s a scary prospect. But as Dalzell’s well-written and very enjoyable book amply shows, there are many reasons why those who wish to be considered as The Good Rich give back and are likely to continue to do so, regardless of tax implications.
Randy Cepuch is the author of A Weekend with Warren Buffett and Other Shareholder Meeting Adventures (Basic Books, 2007).