If the first rule of business is “It takes money to make money,” the second rule is fast becoming “Then give it all away.” Ted Turner started the current round of high-profile philanthropy in 1997 with a $1 billion gift to support the work of the UN. The Gates Foundation, philanthropic child of Bill and Melinda Gates, has $30 billion in assets. And Warren Buffet has pledged 85% of his $44 billion fortune to philanthropy.
Noble actions, yes. Philanthropy is a conspicuous good deed. But business improves the world in ways immeasurably more important than what it gives away.
Every day, we take thousands of business goods and services for granted, from wi-fi, to coffee, to restaurants, just to name a few. Every day, we wake up in a world where strangers work hard to offer us many of the things we want, even if we have not yet decided that we want them. We don’t know where we will eat lunch, but we are confident that someone will work with no guarantee of success to give us that choice. Business does this not because it is philanthropic, but because business serves its own interest by serving ours. Great fortunes are built by satisfying the needs of a great many people, one at a time.
In isolation, such small measures of satisfaction are easily overlooked. But added together from all the individuals involved, they reveal a world that is more satisfied, more cooperative, less violent, and wealthier. The sum of business activity is a better world.
To the extent that business philanthropy is described as “giving back,” it obscures the fundamentally beneficial nature of commercial activity. To the extent that philanthropy is described as business’s most important role in improving the world, it flatly contradicts the facts. To the extent that philanthropy funds individuals and organizations that oppose business, it funds the most dangerous opponents of human progress.
Anyone who wants to really improve the world should stick to what works. First, build an honest and profitable business that takes good care of its most reliable employees, suppliers and customers. Second, when the urge to give it all away strikes, consider whether the gift will promote or destroy the kind of world that made success possible in the first place.
Image property of Walter O. LeCroy