- Younger billionaires give their money away differently when compared with their older peers, research firm Wealth-X found in its 2019 Trends in Ultra-High Net Worth Giving report.
- Ultra-wealthy people under age 45 are not only less interested in bankrolling museums and theatres than those who are older, but also want to be more personally involved in the organisations they do support.
- Billionaire philanthropists and the institutions they support have faced increasing scrutiny from the public in 2019.
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Public opinion is swinging against billionaire donors, and a new generation of ultra-wealthy people are changing how they give back as a result.
Young billionaires are making philanthropy a more hands-on and transparent process, research firm Wealth-X concluded in its 2019 Trends in Ultra-High Net Worth Giving report. “They are allocating their time and skills in a way that has not been done before,” Wealth-X wrote. Older billionaires however, tend to focus on philanthropy after retiring instead of weaving it in throughout their careers, according to Wealth-X.
These trends among young philanthropists are especially noteworthy after three of New York’s leading museums, the Metropolitan Museum of Art, the Whitney Museum, and the Museum of Modern Art all faced protests in 2019 for accepting donations from controversial billionaires.
The report analysed the philanthropic habits of individuals under 45 with net worths above $US30 million, who, according to Wealth-X’s researchers, have pledged to donate at least $US50,000 to charity between 2014 and 2018. Wealth-X expects the trends observed in the report to only grow stronger with time, as young ultra-high net worth individuals currently comprise just 8% of the world’s ultra-wealthy population.
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1. While older billionaires often write checks and (figuratively) walk away, younger billionaires want to be actively involved with the organisations they support.
This trend, called “co-creation” by philanthropy experts, has resulted in fewer buildings named after billionaires and more billionaires sitting on the boards of non-profits, Wealth-X found. Rising scrutiny of billionaire philanthropy has led donors to crave close oversight of how their funds are spent, according to Wealth-X.
Houston-based philanthropist Laura Arnold, now 46, joined the board of REFORM Alliance, the criminal justice-focused advocacy group founded by Jay-Z and Meek Mill, after making a multimillion dollar donation to the group, Business Insider previously reported. Arnold told Business Insider in August that the group’s diverse leadership, which also includes CNN host Van Jones and Vista Equity Partners CEORobert F. Smith, is one of its greatest strengths.
“The group has brought together people with different political perspectives and people with lived experience in the justice system,” Arnold said.
2. Younger billionaires are less likely to fund the arts than older ones.
Education is the top cause for donors of all ages, according to Wealth-X, but the arts and cultural institutions come in second for ultra-wealthy people who are over the age of 65. Over 65% of ultra-wealthy seniors have donated money to the arts, compared with just 35% of ultra-wealthy people under 45, Wealth-X found.
One of the United States’ most prominent arts donors, David Koch, passed away in August at 79 after a battle with cancer, Business Insider previously reported. Koch was a major patron of Lincoln Centre for the Performing Arts and the Metropolitan Museum of Art, but his donations were often mired in controversy as he and his brother Charles also gave millions to fund conservative causes.
3. Ultra-wealthy people under 45 are also more interested in collaborating on philanthropic projects than their predecessors.
Despite this finding, one of the most well-known examples of collaborative giving – The Giving Pledge – was actually spearheaded by two billionaires who fall outside of Wealth-X’s definition of “young.” Bill Gates and Warren Buffett launched The Pledge in 2010, and have since gotten 204 ultra-wealthy people across the globe to commit to giving away the majority of their fortunes, according to the organisation’s website.
But per Wealth-X’s recent findings, this style of giving is generally more popular among the younger generation of billionaires than older ones.
4. Younger billionaires tend to focus their philanthropy on one area, while older billionaires are more likely to give to a wide variety of causes.
Younger billionaires’ singular focus on one area of philanthropy is a result of their desire to become more involved in the work they fund, according to Wealth-X. They also begin their philanthropy at a younger age, according to Wealth-X, giving them more time to build an expertise in a particular field.
The trend is expected to escalate as more young people accumulate wealth, but it can already been seen among a group of young Asian billionaires focusing on climate change, the World Wild Fund’s Laura Weeks told Wealth-X. Bloomberg’s David Ramli similarly reported in September that a group of five Chinese heirs has made climate change the singular focus of their philanthropy, despite being the fifth most popular cause for Chinese philanthropists across all age ranges.
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