By The Associated Press - Monday, March 4, 2013 - 0 Comments
NEW YORK, N.Y. – Mexico’s Carlos Slim remains the world’s richest man for the fourth year in a row, according to Forbes, while Warren Buffett dropped out of the top three for the first time since 2000.
And Facebook’s Mark Zuckerberg saw his ranking drop 31 spots as his net worth declined by $4.2 billion.
A record 1,426 people around the world made Forbes magazine’s latest annual tally of billionaires, up 16 per cent from last year. Their average net worth was $3.8 billion, rising 3 per cent from 2012. The total net worth for the list’s billionaires was $5.4 trillion compared with $4.6 trillion a year ago.
By macleans.ca - Monday, March 4, 2013 at 7:00 AM - 0 Comments
“The problem of our age is the proper administration of wealth.” So wrote Andrew Carnegie, the richest man in the world, in 1889. Carnegie’s solution to the problem of his age—what many today would call income inequality—was to give away his millions as wisely as he could.
Carnegie’s spirit of philanthropy is alive and well these days in the Giving Pledge, a commitment among the very wealthy to give away at least half their fortunes before they die. The pledge began as a private agreement between Microsoft founder Bill Gates and legendary investor Warren Buffett; since 2010, they’ve encouraged other U.S. billionaires to act likewise. And in good news for rich and poor alike, their commitment is now spreading around the world.
Last week, it was announced the Giving Pledge was “going global” with the inclusion of new philanthropists, including Richard Branson, founder of Britain’s Virgin Group, Patrice Motsepe of South Africa, India’s Azim Premji and Vladimir Potanin of Russia. There are now 105 pledgers ranging in age from 28 to 97.
Of course, the Giving Pledge has always had a strong Canadian flavour, despite claims it only breached America’s borders last week. Montreal-born Internet entrepreneur Jeff Skoll was one of the first signatories in 2010. Canadian business titans Charles and Edgar Bronfman both joined Buffett and Gates last year. Elon Musk, the South African PayPal founder who attended Queen’s University in Kingston, Ont., also signed in 2012.
Regardless of how one defines global, however, the recent expansion of the Giving Pledge is clearly a great benefit to all. Beyond the obvious advantage of making more money available to worthy causes, it also presents the opportunity to raise the quality of charitable work everywhere.
The average non-billionaire donor typically bases his or her charitable decisions on familiarity with certain causes and/or the emotional sway of pitches over the phone or at the doorstep. But is this really the best way to give?
One of the key motivators behind the Giving Pledge is a desire to harness the rigour and drive that has allowed pledgers to achieve great success in the private sector and apply this to the charitable sector. Such an approach shares much in common with the provocative new book, With Charity for All: Why Charities Are Failing and a Better Way to Give, by former National Public Radio CEO Ken Stern, who claims most emotion-driven charity is either wasted or used in inefficient ways.
Stern argues charities ought to act more like the private sector, putting greater emphasis on head-office oversight and a scrupulous focus on outcomes. Donors should act similarly, demanding provable, long-term results for their dollars. It’s a whole new way of looking at good works. The author suggests, for example, that the popular preoccupation with extremely low administration costs is entirely misplaced. The mark of a truly effective charity is the ability to self-scrutinize and innovate.
Stern offers up an example from the early years of the Bill and Melinda Gates Foundation when it decided, largely based on guesswork, that smaller-sized high schools would improve student outcomes. Grants of $1 billion were handed out to build small schools or restructure existing schools into smaller units. But five years and 1,500 schools later, a comprehensive review revealed that all this money had done very little for student results. Math scores actually suffered.
“From the ashes [of the small-schools scheme], the foundation developed new requirements that all Gates projects and grantees be subject to rigorous and veriﬁable measurement,” Stern writes. “The Gates Foundation now maintains a department whose sole function is to measure and analyze results.” In other words, the Gates Foundation substantially increased the size of its administrative overhead to ensure its efforts were cost-effective and productive.
What sets billionaires of Giving Pledge apart from the rest of us, besides their money, is the ability to ensure the charitable works they support yield high-quality, efficient outcomes. So now, when the Gates Foundation advocates low-cost bed netting to fight malaria in Africa, or new ways to fund health care, there’s plenty of evidence supporting these decisions. This sort of thoroughness is the reason Buffett is giving the bulk of his fortune directly to the Gates Foundation. And as the Giving Pledge gains traction around the world, it seems reasonable to assume a more results-based focus will filter out across the charitable world. We can hope.
Just as investors have long paid close attention to how Buffett invests his money, donors today ought to mimic how he gives it away as well.
By macleans.ca - Thursday, November 15, 2012 at 5:30 AM - 0 Comments
Sonia Sotomayor hits Sesame Street, Robert Mugabe is the new Cecil Rhodes, plus a king-in-not-waiting
The full-bore FAQ
The royal family still feeds Prince Charles now that he’s 64—just not seven eggs at breakfast, as per popular myth. That and other long-held beliefs about the Prince of Wales were laid to rest this week in an FAQ released by Clarence House on the occasion of Charles’s birthday, as part of the royals’ ongoing effort to put a more normal face on their sometimes remote heir. He doesn’t duck taxes, advocate use of dangerous alternative therapies or loathe modern architecture, according to officials. And he doesn’t spend any—repeat, any—time thinking about being king. All of which is too bad: those were things that made him interesting.
Now, put that wand away
No sooner is Barack Obama re-elected than his first Supreme Court appointee is out spreading his radical anti-princess agenda. Sonia Sotomayor appeared on Sesame Street to confront a pink muppet named Abby who was dressed as a Disney-style princess, telling her that pretending to be a princess “is definitely not a career,” and encouraging girls to be “a teacher, a lawyer, a doctor, an engineer and even a scientist” instead. But her profession hasn’t been very helpful to Kevin Clash, the puppeteer who plays Elmo on the iconic kids’ show. He took a leave of absence after being accused of sexual misconduct, an accusation that was then recanted in a statement by the accuser’s law firm. Maybe he’d be happier if more people became princesses, not lawyers. Continue…
By Kate Lunau - Wednesday, October 31, 2012 at 8:00 AM - 0 Comments
You don’t have to be a scientist or a naval officer to explore the ocean’s depths
What do you get for the billionaire who has everything? Maybe a new toy for the mega-yacht, like a tiny submarine. For the ultra-rich, the deep sea is now the most exclusive of playgrounds.
This week Triton Submarines will show off its line of personal subs, complete with comfy seats, air conditioning and transparent acrylic hulls for that eye-popping view, at the Fort Lauderdale International Boat Show.
The Vero Beach, Fla., company makes four different models that can be launched from boats. The smallest is just 3.2 m long, meaning it won’t take up too much space on the deck. The battery-powered submersibles, which stay underwater for several hours, can carry two or three passengers, including a pilot, to depths from 300 to 1,000 m. “Tritons are designed to be highly intuitive to operate,” says Marc Deppe, vice-president of sales and marketing. With a few weeks of training, owners can learn to pilot the vessel themselves.
By Claire Ward - Thursday, March 22, 2012 at 2:01 AM - 0 Comments
Russian billionaires are buying up high-end real estate in New York for their young daughters
The exotic accents floating in and out of the gilded doors of 15 Central Park West betray the 19-storey limestone building as the home of well-heeled foreigners. The two-towered private residence overlooking Manhattan’s Central Park is next door to the flashy Trump International Hotel and Tower. The tight-lipped, uniformed doormen won’t say who lives here, but recent headlines confirm that Ekaterina Rybolovleva, the 22-year-old daughter of Russian billionaire and potash king Dmitry Rybolovlev, has purchased the 6,744-sq.-foot penthouse for a cool $88 million. A three-bedroom rental in the same building is currently listed at $40,000 a month. One doorman, whose own accent casts him firmly as a local, looks over his shoulder before chuckling, “Well, they ain’t from Brooklyn.”
Rybolovleva is the latest in a string of scions of oligarchs—Russian business magnates—whose families are buying up high-end real estate in New York. The cash-rich crowd has been taking advantage of the economic downturn, investing in the top tier of available properties, according to Edward Mermelstein, a lawyer specializing in high-end real estate for wealthy Russian clients. “New York has gained in popularity,” he adds. “We’re seeing a reverse of what was happening 10 years ago, where London was attracting foreign investment and keeping its immigration policies much looser than the U.S.”
Real estate prices aren’t New York’s only draw. Until recently, most of Russia’s business elite landed in London, earning it the nicknames Londongrad and Moscow on Thames. But Russia-U.K. relations have cooled considerably since the poisoning in London of former KGB officer Alexander Litvinenko. Immigration policies have tightened, and minigarchs have recently become a target of scorn, not just for their tabloid lifestyles. In August, four wealthy Russian youths were convicted of raping a young woman and filming the assault at south London’s Bellerbys College. Add the political unrest following Vladimir Putin’s recent election win, and it’s no wonder that the Rybolovlevs went looking further afield.
By Colby Cosh - Tuesday, December 28, 2010 at 11:57 AM - 68 Comments
When the U of T Cities Centre announced a couple weeks ago that middle-class neighbourhoods are disappearing in Toronto, the Globe and Mail latched onto the study and squeezed it for all it was worth. Or, rather, what little it is worth and then some. The Globe used the study to craft a news article with a horror-movie lede, to order up a nostalgic Margaret Wente column, and to conduct a live online chat debating the issues raised. In the chat a user named “Paul” brought up a technical question for the study’s lead author, David Hulchanski:
I note that the maps drive off AVERAGE income. Do we know what they would look like if they drove off MEDIAN income? The published maps tell us that there is a growing class of people with super-high incomes. I think maps based on the median would be more informative about the middle class.
Let’s raise a glass to Paul. Even if you don’t understand why his point is important, you can see in the chat that Hulchanski’s answer is unsatisfactory: he says both that his team didn’t have median-income numbers going back far enough to make them the focus of the study and that he’s confident it wouldn’t make any difference. I think a criminal lawyer would call this “presenting an alibi and a justification at the same time.”
Hulchanski’s study found that the proportion of middle-income neighbourhoods in Toronto was 66% in 1970; it is now just 29%. Low-income neighbourhoods made up 19% of the city in 1970; that figure’s now 53%. Paul’s problem is that these types of neighbourhoods are defined relative to the mean individual income for the whole city ($88,400 in 2005). A middle-income neighbourhood is one whose residents are within 20% of the mean either way, while a low-income neighbourhood is 20%-40% below it. But a mean or average, unlike a median (i.e., the income that half the city makes more than and half makes less than), is sensitive to scale changes in individual outliers at the top of the distribution.
We can see the problem if we perform a thought experiment and imagine another city; we’ll call it Otnorot. In 1970, Otnorot had an unusual economic structure: it was divided into 100 equal-sized neighbourhoods numbered 1 to 100, each with an average real income corresponding (by total coincidence) to its number. In miserable Neighbourhood 1, the residents scrape by on 1 credit per year per person. In Neighbourhood 47, they make 47 credits on average. In Neighbourhood 100, they make 100 credits apiece, the filthy plutocratic bastards.
What would the Prof. Hulchanski of imaginary Otnorot report back to us about the economic structure of his city? The average income of the neighbourhoods (and the people in them) is, as the young Carl Friedrich Gauss could tell us instantly, the sum of the numbers 1 to 100 divided by 100: 50½ credits. Neighbourhoods 41 to 60, or 20 in all, are “middle-income” neighbourhoods within 20% of that mean. The “low-income” neighbourhoods are numbers 31 to 40; there are 10 low-income neighbourhoods.
By 2005, the vast majority of Otnorotians are living just as they and their forefathers always did. In Neighbourhoods 1-99, real incomes have not changed at all, nor have the relative population sizes changed. Neighbourhood 1 still earns 1 real credit per person, which buys exactly what it did in 1970. Neighbourhood 99 still earns 99. Only in Neighbourhood 100 has there been a change. Perhaps the residents held shares in the wildly successful Otnorotian version of Trivial Pursuit; perhaps they put their heads together and invented smell-o-vision. For whatever reason, they have gone from wealthy to superwealthy (at nobody else’s particular expense, or at least nobody’s in Otnorot), and they now earn a fantastic 8,000 credits per citizen every year.
For most Otnorotians, life hasn’t changed. The presence of the one new hyperrich neighbourhood would certainly have social effects, probably a mix of good and bad; you could, for example, almost certainly expect the Royal Otnorot Museum to acquire a hideous new glass mega-extrusion. But you wouldn’t say that the Otnorotian middle class had disappeared.
And yet—Shock! Concern!—that is exactly what Otnorot’s version of Prof. Hulchanski finds, unwisely using average incomes as his baseline. The overall average income for Otnorot is now a whopping 129½ credits a year, so no group at all outside lucky Neighbourhood 100 reaches the lower middle-income cutoff (103.6). The lower bound for a “low-income” neighbourhood, however, is now 77.7 credits. Where we once had just 10 low-income neighbourhoods out of 100, now everybody from 78 to 99 is defined as low-income, so we have 22.
It so happens that in Otnorot, lukewarm social science performed at public expense and promoted by newspaper editors is punished by means too horrendous to translate into English. Things are done differently in the real Toronto, a mercifully liberal-minded place. But the processes that so confused our alterna-Hulchanski are surely, in an oversimplified way, the same processes that have confused the real scholar. Observers of inequality have observed a genuine, dramatic numerical increase in it over the past two or three decades; one only need have been looking at business-magazine “rich lists” for a while to see that billionaires, all but unknown in the early 1980s, are now as common as seagulls.
There are real social and political dangers from this, to the degree that we allow economic power to translate into social and political power. But it does not mean that the “middle class” has really disappeared or dwindled. It only means that the logarithmic scale of possible incomes has stretched out at the top in a new Gilded Age, a realm of pervasively low marginal taxes and new deregulated industries.
Toronto might really, in some sense, have become bifurcated more arrestingly between rich and poor. But the Cities Centre’s measurement procedure cannot prove that this has really happened. Would it be a good thing for social conditions in Toronto if the Bridle Path were annihilated by a meteor? If that happened, Prof. Hulchanski (and the Globe) would probably be able to report several “low-income” neighbourhoods magically re-entering the “middle class”.
Respectable social science of this sort will ordinarily work with medians or with log-income (as the UN Human Development Index does), or it will approach inequality questions with the aid of the Gini coefficient—a metric totally absent from the Hulchanski study. No doubt Prof. Hulchanski would give the same sour-grapes defence he gave to our friend Paul: don’t have the numbers, don’t need the numbers. But there’s a further question. Why should we necessarily be concerned with between-neighbourhood inequality at all? The Cities Centre would use the same “average income” figure to describe and classify both Neighbourhood X, where everybody makes a healthy $100,000 a year, and Neighbourhood Y, where half the residents make $200,000 and half make nothing, bartering and stealing for their living. Funny sort of egalitarianism, if you ask me.
By Brian D. Johnson - Thursday, September 30, 2010 at 12:00 PM - 0 Comments
The famous TV writer defends his film portrayal of Mark Zuckerberg
So far there’s no evidence that Facebook mogul Mark Zuckerberg has seen The Social Network, the controversial movie that suggests he gained 500 million “friends” by betraying the only real friends he had. But Zuckerberg, who at 26 is the world’s youngest billionaire, has already dismissed the movie as “fiction.” That’s what he said on Oprah last week, as he announced a US$100-million donation to schools in Newark, N.J. The timing of his gesture was suspect. So was his decision to let the cameras into his suburban home, where the man Oprah calls “private” and “shy” is seen kissing his long-time girlfriend. Talk about damage control.
In The Social Network, director David Fincher (Fight Club) paints a damning portrait right from the opening scene, which shows Zuckerberg (Jesse Eisenberg) being ditched by a girlfriend (Rooney Mara)—“Dating you is like dating a StairMaster,” she declares, proposing they just be friends. His response: “I don’t like friends.”
By Jane Switzer - Thursday, August 19, 2010 at 3:40 PM - 0 Comments
Bill Gates and Warren Buffett plan to give away half of their fortunes
How could giving away at least $115 billion to charity win anything but universal, flattering praise, especially in a post-recession age where many charities are in desperate need? Here’s how.
America’s two richest men, Bill Gates and Warren Buffett, plan to give away half of their fortunes (worth a combined US$90 billion), and last week announced they’ve convinced 38 other billionaires to do the same by signing what they’re calling the “Giving Pledge.” The list includes New York City Mayor Michael Bloomberg, media mogul Ted Turner, film director George Lucas and Oracle co-founder Larry Ellison.