Giving Compass' Take:

• Marc Gunther compares the philanthropic and business legacies of noteworthy people including John Bogle, Bill Gates, and the Sackler family.

• How can you maximize the positive impact of both your business and philanthropic pursuits? 

• Learn how to find your philanthropic focus.

How billionaires give away their money is important. How they make their money is more important. Consider John Bogle, the founder of the investment giant Vanguard. As a donor, Bogle was no better than mediocre. But he was a brilliant businessman and innovator. By popularizing low-cost index funds and setting up Vanguard so that it was owned by its mutual-fund investors to own Vanguard, Bogle enriched millions of American investors. Bogle, arguably, did more good for the world than all but a few of the very biggest, smartest American philanthropists.

The Gates Foundation has given away about $45bn and its endowment is worth more than $50bn. Most of that money supported global health and development programs that saved millions of lives and serve the world’s poorest people. For its part, Microsoft has to be judged a net positive for the world, despite criticism of its monopolistic practices in the 1990s. Microsoft created three billionaires — Gates, the late Paul Allen and Steve Ballmer — and an estimated 10,000 millionaires, many of whom have become active, thoughtful philanthropists. (Jeff Raikes, for one.) Today, the company employs about 130,000 people. That’s quite a legacy.

But how does Bogle’s net contribution — remember, he has saved investors hundreds of billions of dollars — compare to other billionaire donors like Mark Zuckerberg, Michael Bloomberg, George Soros or the Waltons.

Debates like these may appear silly but but they’re worth having, in my view, for a couple of reasons. First, those of us who scrutinize philanthropy need to think about the work of billionaire donors and their foundations in a holistic way. If, as it seems, the Sacklers built their wealth on the suffering of others, why does it matter if they are patrons of the arts? The Rockefeller Foundation can’t be held responsible for the ills of Standard Oil, but the foundation can be expected to do as much good as it can when investing its endowment. (It fails that test.) Indeed, most foundations have failed to learn the lesson that Bogle taught — that it’s folly try to beat the market with high-priced investments. Instead, they fritter away tax-advantaged money in pursuit of market-beating returns.

Second, we’re living at a moment when big philanthropy and big business are increasingly under attack — and yes, here I’m thinking of Anand Giradharadas’ Winners Take All, as well as Decolonizing Wealth by Edgar Villanueva. Their searing critiques gloss over the impact of smart philanthropists like Gates and, even more so, the considerable good works of capitalists like Bogle and Kelleher.

Read the full article about legacies by Marc Gunther at Medium.