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Schwarzman backs using wealth for 'the benefit of society'

Julia La Roche
Correspondent

Stephen A. Schwarzman, the 100th richest person in the world with an estimated net worth of $20.7 billion, recently pledged to give away more than half of his massive fortune to charity — in keeping with what he believes the wealthy should do to improve the collective good.

The famed private equity investor and founder of Blackstone (BX), the world's largest private equity firm with $571 billion in assets under management, is the latest person to sign The Giving Pledge. The movement created by Warren Buffett and Bill and Melinda Gates in 2010 was designed as an "open invitation" to billionaires to convert their vast wealth into a broad philanthropic strategy.

In the midst of a verbal war against millionaires and billionaires, Schwarzman explained to Yahoo Finance that the wealthy should want to help out.

"I think capitalism is a system that's created an enormous standard of life pretty much unprecedented in world history,” the billionaire, who’s given generously to multiple charities and causes, said in an exclusive interview.

“And so my gift is really about helping other people. The way it works in our society, you get older. If you have wealth, it should be deployed for the benefit of others and for the benefit of society," he added.

‘Step up philanthropically’

Schwarzman said he didn't need The Giving Pledge to make this decision about what to do with his wealth, but he hopes his move will encourage others in similar positions "to step up philanthropically." 

The investor explained that he felt it was "important to get people on board with the concept of giving, the concept of helping others.”

He added: “And, you know, I was trained that way. Many other people were. But letting society know that people care about other people's lives, and futures, and dreams is something that's worth doing.”

His roots in giving go back to his middle-class upbringing while working at Schwarzman's Curtains and Linens, a dry goods retailer run by his father and grandfather.

"I've been sort of interested in giving money away really since I was watching my grandfather when I was eight years old packing up sort of medical supplies and other things to send to Israel for an orphanage that he was supporting,” Schwarzman said.

After asking his grandfather what he was doing, the elder Schwarzman responded: “'Well, this is our obligation to do things like this.' And so, you know, during my life, I've always done interesting things philanthropically." 

Before signing the pledge, the 72-year-old investor has given over $1 billion to philanthropic causes, most of which focus on education at all levels.

He's provided tuition assistance to inner-city high school students, endowed a prestigious fellowship at China's Tsinghua University, and gifted $350 million to Massachusetts Institute of Technology (MIT) to build out a college dedicated to the study of artificial intelligence.

"[One] of the things about getting older, even though you may not think you're getting older, is you have to think about the future, and I've done that before the pledge,” the billionaire said.

“And I'm giving a very significant amount of money to charity because, you know, in a way, it's a recycling. You know, I've been lucky enough to do well, and I like helping other people. And it actually is thrilling, sometimes,” he added.

Julia La Roche is a Correspondent at Yahoo FinanceFollow her on Twitter.

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