Bill Ackman says capitalism is better at improving society than philanthropy: ‘You can waste a lot of money’

“Be careful with philanthropy. You can waste a lot of money,” Ackman said in an interview with Fortune that the magazine published Aug. 7. He spoke with Alyson Shontell, Fortune’s editor in chief, for the magazine’s Fortune 500: Titans and Disruptors of Industry series.

His warning comes as Americans keep giving more. Donors gave an estimated $617.2 billion to U.S. charities in 2025, up 5.7% from the year before, or 3% after inflation, according to Giving USA 2026. Indiana University’s Lilly Family School of Philanthropy researches the annual report. Individuals gave the largest share, at $394.2 billion.

Why Ackman thinks charities waste money

In the interview, Ackman called philanthropy “vastly less efficient at solving problems than capitalism,” Fortune reported. Businesses also create far more jobs than charities do, he added.

Part of the problem, in his view, is whose money is being spent. Organizations that spend other people’s money without top-notch oversight can end badly, he said, and that describes many nonprofits.

On top of that, Ackman argued that many nonprofits lack the discipline that comes with running a business. As a result, he said, they’re less motivated and have a harder time hiring the best people. He added that charities miss out on things that keep companies in line, like stock for employees, pressure from the market and the threat of mergers or buyouts.

He also warned that some nonprofits wander away from the mission they were founded for. In the worst cases, Ackman said, they get taken over and turned into political vehicles.

Jeff Bezos, who now lives in Miami, made a similar case on CNBC’s Squawk Box on May 20. If he does his job right, the 62-year-old Amazon founder said, the value his for-profit companies create will be “much, much larger” than the good he does through charity.

Even so, Bezos said in the same interview that he gives billions of dollars to charity. And back in 2022, he told CNN he plans to give away most of his fortune during his lifetime.

Why he’s still putting $400 million into a nonprofit

Ackman sat down with Fortune the same day he closed on a Manhattan building for a new brain institute. Weeks later, in an Aug. 19 post on X, he said he’d donated 10 million shares of Pershing Square Inc. to create the Ackman Oxman Institute. He’s building it with his wife, designer and entrepreneur Neri Oxman.

The gift is worth roughly $400 million, Ackman wrote, and he said a second gift of similar or greater size is coming. The institute is a Manhattan center for brain research and recovery.

The project took on new urgency after his 26-year-old daughter, Lucy, was found unconscious in her Brooklyn apartment in February after a brain hemorrhage, Ackman wrote. He told Fortune the experience pushed his giving toward brain science.

This time, though, he’s setting up the institute to run more like a business. It will use charity money to start for-profit companies that develop devices and treatments for stroke and brain-injury patients. Staff will get a share of the equity, much like at Pershing Square, he told Fortune.

The goal, he said, is to pay for research that often falls through the cracks. In his view, venture capitalists will back health care startups but usually skip basic science that’s still far from making money. That leaves it to the government or donors.

What Ackman’s warning means for your donations

If you give $50 a month to a local food bank or animal shelter, you’re one of the donors whose money Ackman is talking about. And you can check how it’s being handled without a billionaire’s resources.

A good place to start is the IRS Tax Exempt Organization Search. It’s free, and it shows whether a group can receive tax-deductible donations. It also has copies of the yearly returns charities have filed in recent years.