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More billionaires donate fortune

By Judy Martel · Bankrate.com
Friday, December 10, 2010
Posted: 10 am ET

Back in August, I wrote about investor Warren Buffett's plea to the wealthy to publicly commit to donating most of their fortunes to charity. Called the "Giving Pledge," it immediately attracted heavy-hitters like Oracle founder Larry Ellison, movie producer George Lucas, and oil tycoon T. Boone Pickens.

Recently, 16 additional billionaires signed up (which raises the total number of pledgers to more than 50) and includes a new crop of household names, including 26-year-old wunderkind Facebook founder Mark Zuckerberg, former junk-bond king Michael Milken and AOL co-founder Steve Case.

Charitable giving has always been a part of an estate-planning strategy for many -- if not most -- wealthy families, in part because of the tax benefits. But Buffett is asking for a more comprehensive dedication to philanthropy.

Warren Buffett

Warren Buffett

Although he's walking the walk by pledging 99 percent of his own fortune to the Bill and Melinda Gates Foundation, the idea could prove to be a hard sell for many billionaires. By making charity the beneficiary of most of their money, they're cutting out potential heirs. Buffett has gone on record as saying he's opposed to giving heirs enough money that they don't have to work, but not all families can divorce themselves of the belief that their fortune is part of their legacy to their children.

The economy has been tough on philanthropy over the past few years, but it remains to be seen if the Giving Pledge will measurably improve the outlook. After all, Zuckerberg is only in his 20s, and, like many of those who have signed up, already tended toward philanthropy. This fall, for example, he pledged $100 million for public schools.

Yet many believe that private wealth funneled through charity provides a more direct means of assistance than government programs, and is a better use of the potential billions than if it is channeled through generations of families. What do you think?

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