The Billionaire's Burden

John Caudwell has a reputation as a philanthropist. Some might even say, too great of a reputation. After having done some philanthropic work for children here and there, he wanted to make a greater commitment. In 2000, he founded Caudwell Children, a charity that serves kids with serious illness. The founder of Phones4U mobile phone retailer became a billionaire after selling his business for $2.3 billion in 2006, and used his money to not only donate to the charity, but also to cover all of its operational expenses.

Now, The Sentinel of Staffordshire, England, reports that the nonprofit's donations have fallen from 3 million pounds to 2 million. Must be because of the recession, right? Actually, the reason donations have fallen is because donors in the surrounding area mistakenly believe Caudwell provides all of the funding — including donations — for the organization himself. It's true he does give a large gift every year and he pays for the costs of running the charity. But the organization still must rely on outside contributions. Caudwell Children is now trying to get the word out that the billionaire isn't providing all the money, but because he does cover all of the operational costs, every cent of the donations go straight to the kids.

It seems when you have that much money, everyone assumes you've got it covered.