Why Latin America's Richest Man Still Needs To Raise His Giving Game

Dec 17, 2014

Mexican billionaire Carlos Slim (right) with former U.S. President Bill Clinton (center) and Colombia President Juan Manuel Santos at the Future of the Americas conference.
Credit Pedro Portal / El Nuevo Herald

When I met Mexican telecom tycoon Carlos Slim six years ago, he was the world’s richest man.

Slim, however, wasn’t the world’s most generous giver. He was called the Latin American Scrooge because he’d steered such a relatively small share of his then $65 billion fortune to philanthropic causes. In our interview at his Mexico City office, he said he was correcting that – and he read a passage from “The Prophet” by the Christian philosopher Kahlil Gibran:

“Give now, that the season of giving may be yours and not your inheritors’.”

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Slim is, in fact, a better philanthropist today. But even so, when he visited South Florida last week for the Future of the Americas conference, he was greeted by full-page ads in the Miami Herald reminding him that his season of giving still pales in comparison to that of billionaires like U.S. software mogul Bill Gates.

“The fact that Slim hasn’t signed the Giving Pledge illustrates his lack of leadership,” says Andres Ramirez, a Las Vegas political strategist who heads Two Countries One Voice, the Latino activist group that placed the ads.

The Giving Pledge is a promise made by more than 100 of the world’s wealthiest people – including Gates (who at $82 billion is currently No. 1) and Miami condo king Jorge Perez – to earmark the bulk of their treasure for charity. Organizations like Two Countries One Voice want the same vow from Slim, whose wad today is $72 billion (currently No. 3 behind Gates and U.S. investor Warren Buffett).

And they insist it’s not just about Carlos – it’s about a continent.

Slim can set the tone for other people to begin to develop a culture of philanthropy and responsible giving back in Latin America – Andres Ramirez

Slim, says Ramirez, “can set the tone for other people to begin to develop a culture of philanthropy and responsible giving back in Latin America.”

The holidays are a good time to consider how lame the culture of philanthropy has traditionally been in Latin America – where the gap between rich and poor remains among the widest in the world.

The London-based Charities Aid Foundation just released its annual World Giving Index, a ranking of the charitable donation rates of 135 countries. Five of Latin America’s seven largest economies, including Mexico, sit squarely in the bottom half.

To help fill the void, many Latin American expatriates run charities in the U.S. Paulina Montes founded Manos del Sur (Hands of the South), 15 years ago in Miami after a visit to Argentina, where she grew up.

“I went with my seven-year-old son,” says Montes, whose organization donates hundreds of thousands of dollars each year for education around Latin America. “We were on the streets and he was seeing children asking for money at 10 at night and said, ‘Why aren’t they home, why aren’t they in school?’”

DEEP DISTRUST

A big reason for Latin America’s philanthropic fail is a deep distrust of the region’s historically dysfunctional institutions.

“It causes everyone to keep to himself, to his own family,” says Eduardo García, editor of the online Mexican business journal Sentido Común. “That damages the possibilities of having a culture of social concern.”

García agrees that Slims has to lead the continent out of that insular inertia – especially since his telecom titans, Telmex and América Móvil, are virtual monopolies in Mexico.

Slim, however, once quipped that he wasn’t interested in “playing Santa Claus.” When I asked him to explain that remark in 2008, he said he meant that he preferred a more productive form of charity over “the pure donation of resources.”

He was still formulating what that meant. But things got more urgent two years ago when the Organization of Economic Cooperation and Development in Paris issued a damning report that said Slim’s companies had overcharged Mexican customers up to $13 billion a year.

Full-page ad placed by Two Countries One Voice in the Miami Herald last week urging Carlos Slim to sign the Giving Pledge.
Credit Two Countries One Voice

 Slim denied it. “But his reputation has declined,” says García, “and one way of cleaning it has been to give more money back.”

And he is. Slim has now put $8 billion into his two foundations. They’re distributing tools like laptop computers to millions of Mexicans and hundreds of millions of dollars to fight blight in Mexico and Central America.

At the same time, experts say Latin America is evolving, too. Chile and Colombia landed in the top half of the World Giving Index this year, and most Latin American corporations now have charitable foundations.

“It’s a completely different picture,” says Montes, who credits factors like globalization and social media. “We’re seeing a change of mindset.”

Still, Latin America has a long way to go. And that, say his critics, is due in no small part to the feeling that Slim himself still has a ways to go.

At the Future of the Americas conference at the University of Miami, Slim said, “The challenge of this new civilization  . . . is human capital development.”

In Latin America, no one’s in a better position to tackle that task than Slim.

‘Tis the season.