William and Karen Ackman
William & Karen Ackman
Amount donated: $235m
Philanthropic Causes: global development, health, education, human rights
Region of philanthropic focus: global
Ranking: #17 on the Chronicle of Philanthropy’s top 50 biggest givers in 2011.
Net Worth: $1.6bn
Source of wealth: hedge funds
It’s fair to say that financiers are not exactly at an apex of popularity in the media at the moment, but US hedge fund manager William (Bill) Ackman is doing his bit to paint them in a more positive light through the philanthropic Pershing Square Foundation which he runs with his wife, Karen. He is equally philanthropist and hedge fund manager; upon signing the Giving Pledge in 2012 in anticipation of giving away more than half of his $1.6bn wealth, he explained that “I get tremendous pleasure from helping others. It’s what makes my life worth living.”
Growing up in a wealthy family in New York, his charitable commitment was ingrained in him by his father, the chairman of a real estate financing firm. His father also instilled in him a work ethic by emphasising that he would not be leaving his fortune to Bill. Subsequently, he attended Harvard to graduate magna cum laude and then obtain an MBA. Karen also attended Harvard, studying landscape architecture. Acting against his father’s advice, he then started his own investment firm, Gotham Partners, in 1988. A mismanaged golf course
acquisition and ensuing litigation led to him stepping away in 2002, but in 2004 he announced his return by launching Pershing Square Capital Management LP with $54m. Today, the fund is worth $12.4bn.
That’s not to say that the fund has been without its troubles; he is perhaps best known for betting on the failure of Herbalife and subsequently engaging in a lengthy and public criticism of the company as a pyramid scheme in a way that has led to allegations of market manipulation. To counteract these accusations, Ackman claimed that any money he made from the Herbalife position would be given to charity. However, the short has so far lost the fund a great deal of money, and in January 2016 Ackman announced a 20.5% annual loss; the worst result in the fund’s history.
Nevertheless, whilst Pershing Square Capital Management faces great challenges, the Pershing Square Foundation continues to invest heavily in global economic development, health, education and human rights. Although not religious, one of Ackman’s first charitable acts was to give $6.8m to reduce the debt of the Centre of Jewish History. Since then, the Foundation’s causes have ballooned to encompass a $2m gift to the Innocence Project which spearheads appeals for the wrongfully convicted, a $10m donation to Human Rights Watch to further African and Women’s Rights initiatives, and support for the Robin Hood Foundation which alleviates poverty in New York City.
It’s a fair illustration of the scale of the work the Pershing Square Foundation is doing that these gifts seem miniature in comparison with their other commitments. In 2015 the Foundation made a mammoth gift of $25m to help improve the New Jersey school system; a $25m that was dwarfed by Mark Zuckerberg’s $100m in a surreal glut of philanthropy. Another $25m was endowed in a 2013 joint project with the Sohn Conference Foundation to launch a cancer research centre in order to fund risky and potentially worthwhile research that would otherwise not receive funding.
When pushed on which enterprise represents the Foundation’s philosophy, however, Ackman often cites one of their first projects, the One Acre Fund. This East African-based non-profit provides seeds, funding, irrigation, and expertise in exchange for half of these farmers’ surplus, which is then ploughed back into investing in other farmers. In largely
arable economies where hunger remains prevalent, the potential for organisations like these to do good seems immeasurable. Ackman clearly thinks so, anyway; the Foundation provided them with $7m and is adamant that by the end of 2016 the organisation will have lifted 100,000 families out of hunger.
Still the south side of 50, Ackman’s commitment to philanthropy seems to be here to stay. Indeed, his commitment to economic redistribution has been a central part of his worldview since he read the work of John Rawls at university, whom he credits with inspiring him by stating that “we should all imagine we might have been born into any circumstances and organize society accordingly.”