Bill Ackman has spent roughly two decades and close to $1 billion on philanthropy. His verdict: Capitalism can often have a stronger societal impact.
“I’ve spent a fair amount of time on philanthropy, and it’s vastly less efficient at solving problems than capitalism,” the Pershing Square Capital Management founder and CEO told Fortune editor-in-chief Alyson Shontell in an interview for the Fortune 500: Titans and Disruptors of Industry series. “You create far more jobs through capitalism than through philanthropy.”
Nonprofits, Ackman argued, lack the equity incentives and market pressure that keep enterprises sharp—and can be “taken over” and turned into “political vehicles instead of sticking to their original mission.”
The argument puts him alongside Jeff Bezos, who made a similar case on CNBC’s Squawk Box in May: “If I do my job right, the value to society and civilization from my for-profit companies will be much, much larger than the good that I do with my charitable giving,” the Amazon founder said. The two comments express a shared conviction that has become a talking point among elite capital allocators: that operating a great company, not writing checks, is the more impactful measure of social contribution.
What makes Ackman’s version interesting is that he isn’t abandoning giving. He’s trying to redesign it. “I’ve learned a lot over 20 years of philanthropy about what works and what doesn’t,” he said. “And I’m sure there’s more to learn. The goal is to focus on gaps in the capital markets.”
The hybrid
His newest venture, the Brain Research Rehabilitation Institute, is seeded with nonprofit capital but structured to spin out for-profit companies—devices, molecules, and treatments for brain injury and stroke patients—with equity shared among the institute’s staff, mirroring the compensation structure he built at Pershing Square. “The goal is to use philanthropic capital to build something sustainable using for-profit, capitalist principles,” Ackman said.
The institute’s focus is, in part, personal. As Ackman revealed to Fortune’s Jeff John Roberts, his daughter Lucy suffered a brain hemorrhage in February, an experience that he said reoriented his philanthropic priorities toward neuroscience. Ackman described the model as capturing “the best of the nonprofit”—access to institutions and researchers who won’t partner with for-profit entities—while injecting the market discipline he says keeps organizations from drifting.
The structural logic targets a specific gap. Venture capital funds health care startups. Government funds basic research. The space in between—basic science too far from revenue to attract VC money, too specialized to compete for federal grants—goes largely unfunded. “There’s venture money for health care startups,” Ackman said, “but a lot of basic science research is too far from revenue or a company to attract venture funding. So it has to be government-funded or philanthropic.” He wants the latter, with market discipline bolted on.
He also needs something only a nonprofit can get: access. “There are things you can achieve as a nonprofit, like hiring certain people or partnering with institutions that will only work with nonprofits, that would be harder as a for-profit.” Nonprofits, in other words, are more efficient than capitalism in exactly one dimension—and that dimension is the one he needs.
Ackman’s earlier giving through the Pershing Square Foundation had been deliberately broad: “[Warren] Buffett says diversification is protection against ignorance,” Ackman explained, noting that the foundation was “extremely diversified in its earlier years.” That’s changed. The interview took place on the day he closed on the building that will house the institute.
The political backdrop
Ackman’s case for capitalism arrived alongside a more combative argument about what happens when governments try to substitute for markets. His target was New York City, where Mayor Zohran Mamdani’s rent-freeze plans have made Ackman one of his most prominent critics. The diagnosis is specific: Roughly half of New York City apartments are rent-stabilized, which forces landlords to raise rents on the other half to cover costs. About 60,000 units have been pulled off the market entirely because renovation costs can’t be recovered under rent regulations, while getting a pipeline approved in New York State takes 15 years—both figures that broadly check out. “Watch what happens to New York City if Mamdani succeeds in implementing these plans,” Ackman warned.
His counter-model points to places that have gotten out of the way: Austin, where rents have fallen because it’s easy to build; Florida, “an incredibly well-managed state” that recently voted to eliminate real estate taxes.
The structural answer he’s advocating isn’t charity—it’s market participation. “Wages cannot compound as quickly as stocks,” he said, “so everyone needs to participate in the stock market in order to believe in capitalism.”
The Bezos-Ackman framing draws a structural critique: treating corporate success as a public good lets the ultrawealthy claim credit for employment, innovation, and consumer convenience as social contributions without accounting for market dynamics—on labor, housing, and concentration—that their own companies helped shape. Bezos’s philanthropy record has been cited as a test: Bezos told CNN in 2022 that he would give away most of his fortune, and he is in the midst of giving away $10 billion to combat climate change, spearheaded by his wife, Lauren Sánchez Bezos. They recently partnered with Leonardo DiCaprio to try to rescue 100 of the most endangered species in the world.
Ackman’s own argument contains a version of the same tension: His case that capitalism beats philanthropy was followed, the same morning, by signing the deed on a nonprofit building. His answer is that the building is designed to prove capitalism wins even through a nonprofit structure.