Give your entire wealth to strangers

I was in a recent discussion with someone who has just joined a not for profit organization whose area of focus is sexual reproductive health in Africa. Having sat on the boards of a few not for profit organizations, my curiosity was piqued regarding the source of funding for the organization’s programmes across various African countries. Said curiosity morphed into a question that yielded quite an interesting response. The organization is funded largely by American donors – the usual corporate suspects like Bill and Melinda Gates Foundation, as well as very many private individual donors. And that is what caught my attention: private individual donors who are inspired to gift while alive or bequeath post humously. What would inspire a right minded, manifestly talented individual who has created and multiplied wealth to just give it to absolute strangers, when the better option would be to keep it in the bank and let children and relatives salivate over the prospect of their inevitable death?

So I had to do a little research over this phenomenon, as this equatorial part of the world has yet to see widespread, unabashed and selfless giving at a time when amassing personal wealth has become a specialized race in the Kenyan corruption Olympics. I pulled up a Barron’s List of top 25 givers in 2013. Hang on to your hats, this was largely an American list of givers and the recipients were largely American institutions. Top of that list was – don’t hold your breath – Facebook founder Mark Zuckerberg and his wife Priscilla Chan who gave out $999.2 Million (in simple words, a billion dollars or Kshs 102 billion) of Facebook stock to charity. But not just any charity, they chose to give it to Silicon Valley Community Foundation which is a philanthropic clearinghouse, collecting charitable contributions and distributing them to hospices, educational groups, museums and clinics. I guess Mark and Priscilla figured: let’s give this money to a credible organization that knows how to better place these funds than we can. (Food for thought to be touched on later) Also on the top 25 list that year was Michael Bloomberg, the founder of Bloomberg, former New York City Mayor and 7th wealthiest man in the United States, who gave $452 million ( Kshs 46 billion) largely to his former alma mater, John Hopkins University, to fund scholarships as well as research. Actually a number of givers on that list gave money to their former universities; well run institutions that have demonstrated a great ability to efficiently channel donor funds into growing an established body of academic research and produce the nation’s greatest talented workforce.

Notably, Warren Buffett, chairman, CEO and largest shareholder of Berskshire Hathaway, holds the individual giving record. In 2015, Buffett donated $2.84 billion (Kshs 289.7 billion) of Berkshire Hathaway shares to the Bill and Melinda Gates Foundation as well as four family charities, three of which are overseen by his children. The purpose of donating stock is for the recipients to sell the same as appropriate and realize the cash value of the gift. The 2015 donation was his tenth annual one, bringing his total charitable donations to a staggering $25.5 billion (Kshs 2.6 trillion or 500 billion more than Kenya’s Kshs 2.1 trillion 2015/16 budget) according to Forbes Magazine. In case you missed it, Buffett is the fourth wealthiest man in the world and has pledged to bequeath 99% of his $64.5 billion net worth (or an eye-popping Kshs 6.58 trillion) to charity when he dies.

You don’t have to go far in Kenya to find battle lines drawn between brothers and sisters, mothers and children, uncles, aunts versus nephews and nieces all picking over the remains of an enterprising founder’s hard work like vultures over carrion. Something that these entrepreneurs know is guaranteed to happen, as there is always untidiness in the intestate death of a patriarch with multiple wives, multiple children and multiple beneficiaries of his largesse. It cannot be that one should work extremely hard over one’s lifetime: creating businesses, employing workers, enriching a supply chain and contributing to the taxman all for it to go belly up in lawyer’s fees and stomach churning blood feuds because we still subscribe to centuries old cultural succession practices that didn’t anticipate the kind of stupendous wealth that is at stake today. I’m not just talking about the ubiquitous Kenyan business magnate. I’m talking about you and I who have a few assets that may seem innocuous today, but which can be sold upon our death to generate a sum of money that would buy desks in a school, or a few hospital beds in a far flung medical institution, or pay for 50 pupils to get secondary education. Because our children have received the best gift from us, a good education which should put them in good stead to build wealth of their own instead of assuming the widespread sense of inheritance entitlement that I often observe from the children of the rich.
Now back to my earlier point about food for thought following the Zuckerberg contribution to the philanthropic clearinghouse. While our public universities and hospitals are crying for help, our record of funds mismanagement makes them poor candidates for direct gifting.

We lack an institution through which we can channel wealth for distribution to various worthy causes. An institution that is well-run, free from political interference, has perpetual succession and extremely strong governance mechanisms to ensure funds are appropriately and transparently used. Such an institution may provide an easy alternative to Kenyans who wish to leave their assets outside of family, as well as provide a mechanism to maneuver around the Kenyan laws of succession that require for dependents to be provided for, as one can gift one’s wealth while alive. Regardless of that, there are still many credible NGOs that can put our hard earned money to better use than some of our privileged children. Food for thought in 2016 and happy New Year to you!

Carol.musyoka@gmail.com
Twitter: @carolmusyoka