Billionaire investor Bill Ackman has dedicated roughly two decades and nearly $1 billion to philanthropic causes. His conclusion: capitalism frequently delivers greater societal benefit.

"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, operate without the equity incentives and competitive market pressure that keep businesses focused—and they risk being "taken over" and transformed into "political vehicles instead of sticking to their original mission."

A Shared Conviction With Bezos

The position aligns Ackman with Jeff Bezos, who advanced a similar argument during a May appearance on CNBC's Squawk Box. "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.

Together, the two statements reflect a belief that has gained traction among elite investors and technology leaders: that building and running a successful company, rather than donating money, represents the more consequential form of social contribution. The argument echoes a broader case advanced by figures including venture capitalist Marc Andreessen, whose 2023 "Techno-Optimist Manifesto" contended that market-driven technological progress is the primary engine of human welfare. It also places both men in a nuanced relationship with the Giving Pledge—the commitment launched by Warren Buffett and Bill Gates in 2010 through which hundreds of billionaires, Ackman among them, have pledged to give away the majority of their wealth.

Redesigning Philanthropy Rather Than Abandoning It

What distinguishes Ackman's approach is that he is not retreating from giving—he is attempting to restructure 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."

His newest initiative, the Brain Research Rehabilitation Institute, is seeded with nonprofit capital but designed to spin off for-profit enterprises—medical devices, therapeutic molecules, and treatments for brain injury and stroke patients. Equity would be distributed among the institute's staff, mirroring the compensation framework Ackman established at Pershing Square. "The goal is to use philanthropic capital to build something sustainable using for-profit, capitalist principles," he said.

The institute's mission carries a personal dimension. As Ackman disclosed to Fortune's Jeff John Roberts, his daughter Lucy suffered a brain hemorrhage in February—an experience he said redirected his philanthropic focus toward neuroscience. Ackman characterized the model as combining "the best of the nonprofit"—specifically, the ability to collaborate with institutions and researchers who decline to work with for-profit entities—with the market discipline he says prevents organizational drift.

Targeting a Funding Gap

The institute's structural logic addresses a well-defined void in the biomedical research funding landscape commonly referred to as the "valley of death": the zone where promising science is too far from commercial revenue to attract venture investment, yet too applied to compete for federal basic-research grants. Venture capital backs health care startups positioned near commercialization. Government agencies fund basic research. The territory between them remains largely unfinanced.

"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 prefers the latter, augmented with market discipline.

He also requires something only nonprofit status can provide: institutional 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." In this single dimension, Ackman conceded, nonprofits can be more effective than capitalism—and it happens to be the dimension he needs.

Ackman's earlier charitable work through the Pershing Square Foundation was intentionally broad-based. "[Warren] Buffett says diversification is protection against ignorance," Ackman explained, noting that the foundation was "extremely diversified in its earlier years." That strategy has since narrowed. The Fortune interview took place on the day he finalized the purchase of the building that will house the institute.

The Political Backdrop

Ackman's endorsement of capitalism was paired with a pointed critique of government intervention in markets. His focus was New York City, where Mayor Zohran Mamdani's proposed rent freeze has made Ackman one of the plan's most visible opponents.

His analysis was specific: approximately half of New York City apartments are rent-stabilized, compelling landlords to increase rents on the remaining units to offset costs. An estimated 60,000 units have been withdrawn from the market entirely because renovation expenses cannot be recouped under rent regulations. Meanwhile, securing approval for new housing projects in New York State takes roughly 15 years—figures that broadly align with available data.

"Watch what happens to New York City if Mamdani succeeds in implementing these plans," Ackman warned.

He pointed to alternative models in places that have reduced regulatory barriers: Austin, where rents have declined due to a streamlined building process, and Florida, which he called "an incredibly well-managed state" that recently voted to eliminate real estate taxes.

The solution he advocates is market participation, not charity. "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 Structural Tension

The Bezos-Ackman framing invites a structural critique that has been articulated by commentators including Anand Giridharadas, whose 2018 book "Winners Take All" argued that elite celebrations of business as social good can obscure the systemic dynamics—labor practices, market concentration, wealth inequality—that generate the very problems philanthropy seeks to address. Treating corporate achievement as a public good enables the ultra-wealthy to claim credit for job creation, innovation, and consumer benefits as social contributions, without fully accounting for the market dynamics—around labor, housing, and industry concentration—that their enterprises have influenced.

Bezos's own philanthropic record has been cited as a test case. In 2022, Bezos told CNN he intended to give away the majority of his fortune. He is currently distributing $10 billion to fight climate change, an effort led by his wife, Lauren Sánchez Bezos. The couple recently partnered with Leonardo DiCaprio on an initiative to protect 100 of the world's most endangered species.

Ackman's argument embodies a version of the same tension: his assertion that capitalism outperforms philanthropy came on the very morning he signed the deed on a nonprofit facility. His response is that the building is intended to demonstrate that capitalism prevails even within a nonprofit framework.