James, a very well-reasoned and well-written post – your assessment of the manifold perils of the Keeping Pledge are spot on. I agree with all your points. And there are even a few more points for the Zucks and others to contemplate, as this gesture is likely to become a normative act for charity:
How might we outline a roadmap that successfully negotiates the greater potential of their Keeping Pledge LLC structure to in fact create greater net-positive externalities for all? The die is now cast for Mark and Priscilla, do you think they understand they face a steep challenge for accomplishing as significant or even similar greater good in the world than what their money could provide in a tax-free transfer to established charities? Even though the field presents a low bar of performance by common sense standards of accounting and moral calculus, it is still a big challenge to make rhetoric into results.
Our current third-party payer system of philanthropy produces so many inefficient and so few effective actual net-positive improvements in the world (when one fully allocates the costs in magnitude of largesse expended to measurable outcomes produced, i.e. it is still more effective to simply make direct transfer payements to the afflicted we’re hoping to help), that there are now more and more attempted innovations trying to supplant our current charitable system built entirely on the invisible hand of an IRS code. The rhetoric of impact investors and social entrepreneurs expose just two recent examples. Maybe the Keeping Pledge is another, yet immature vintage?
The observable fact of trend is that if the Zucks were to add another $45 billion over a lifetime to the trillions and trillions arriving in Stone Soup contributions it would not measurably accomplish much in outcomes that improve our world, exepting perhaps in sustaining broader employment of liberal arts majors in charitable stewardship.
The perils of the Keeping Pledge you outline are accurate and likely, yet I would much prefer Mark and Priscilla (and all other wealthy citizens) remain personally on the hook for using their wealth to produce and scale some objectively measurable and verifiable social impacts, rather than equitably spreading dissatisfaction by punting their money across time into the distributed hands of many charities, or picking a few favorites and endowing them with perpetual mediocrity. Until charities are financially rewarded more for actual outcomes than for budgetary needs and best effort pledges, we will not see actual outcome performance that achieves significance against established market baselines or world class social impact results. At least not at a cost any rational investor or consumer would want to pay.
Please forgive my digression, it is not a rant against the many who aspire to create a better world, more so a Chruchillian observation: Philanthropy is the worst form of charity, but for all others… so far. I am hopeful. Perhaps we should also give Mark and Priscilla a roadmap that improves their probabilitlies for making hope and emotional gestures into the better results we all intend.
Besides, Buffett made an even better, perhaps best, trade in his life when he punted his money to Gates — all the public glory and none of the responsibiliity for actual results… smart man.