March 8, 2011

Bill Gates’ Philanthropy Costs Him Forbes’ Richest Man Title

As his foundation gives away billions, he stays at number two on the list

Bill Gates has given it away. His position as richest man in the world, that is, on the Forbes billionaires list, which will be released Wednesday. Having given away more than a third of his wealth, some $28 billion, to charity, Gates took himself off that lofty pedestal last year and is now down to a paltry $49 billion.

While Gates is still in the top three, along with Warren Buffett and Carlos Slim, last year’s richest man, he would have topped the list if not for the money he channeled into his foundation.

According to a Reuters report, the Gates foundation is responsible for making the Microsoft founder finish second of the three. Slim comes in at around $60 billion, while Buffett is in third  with $47 billion.

Without philanthropy, David Lincoln, director of global valuations at wealth research firm Wealth-X, estimated Gates’ net worth would have been approximately $88 billion this year. "It wouldn't be a competition," he said in the report. "[Gates] would have a comfortable margin if he had never discovered philanthropy."

While Gates and Buffett have focused a considerable portion of their personal wealth on charity, Slim is not cut from the same mold. Although he has pledged several billion to charity, according to the report, he thinks more good is to be done by businessmen who create jobs and wealth through investment, "not by being Santa Claus."

Santa Claus or not, Gates and Buffett have had, through their campaign called The Giving Pledge, had a substantial influence on the face of philanthropy, according to Glen Macdonald, president of the Wealth and Giving Forum. Macdonald said in the report that Gates’s approach had changed the way other wealthy people handle charitable giving, sayin, "Encouraging people and leading by example—there's no question that's going to have influence on people's giving patterns. They are going to give sooner and they are going to give in greater amounts."

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