With more billionaires in the world this year than ever, the conversation eventually turns to, “What happens when they pass away?” More and more often, that question results in a single word: “Charity”. It seems more often that the self-made billionaires have decided to leave their children with either very little, or nothing altogether.
Bill Gates, Michael Bloomberg and Kevin O’Leary are among those trying to end dynastic wealth by not giving it to future generations. But just giving it all away – is this a good thing? Let’s take a look, shall we?
Warren Buffet, along with the Gates family, is at the forefront of what has been dubbed the Giving Pledge. His take on the whole situation is, “I want to give my kids just enough so that they would feel that they could do anything, but not so much that they would feel like doing nothing.”
Now while it isn’t up to me, I can at least speculate as to how I think it could all play out. According to the Williams Group, as many as 70 percent of wealthy families lose their wealth by the second generation, and then a Holy Crap!-inducing 90 percent by the third. So, score one for leaving it to charity, because at least then it will (presumably) do some good.
O’Leary (a Canadian businessman) is a case that fascinates me, because while he is as self-made as the rest of the people mentioned so far, he did get a leg up in the form of a $10,000 loan from his mother.
He has set up trusts so his children and all their descendants will never worry about educational costs, but none will see a single dollar in living expenses after they graduate. Gates and Buffett have similar setups with their children.
The problem, in my opinion, lies with these children growing up in situations (save the Buffett family; he still lives in his first, 30ish-thousand-dollar home in Omaha, Nebraska) where they have never known a life outside of private jets, and extravagance.
They have never seen a struggle to pay a bill, and may not even know what it’s like. They come from a world of unlimited access, being able to walk up to a complete stranger (and in all fairness, many of them, and their parents, have done so) and with a couple phone calls and a swipe of an Amex black card, change that person’s entire life without noticing a hit to their account.
This could put them in a difficult position when they try and continue this same philanthropy, or if they want to do a 180-degree turn from mom and dad, and get an arts degree and attempt to live on that.
I love the fact that between Gates, Mark Zuckerberg, Buffett and Jeff Bezos, they will be leaving at the very minimum $200 billion among them if their pledge to give half of their wealth goes through. Three of those four have pledged 99 percent, so that total will likely double that or more by the time it’s all said and done. That part is beautiful, the human spirit of giving and charity. But I worry if the other gifts they will give us, are entitled or even well-meaning offspring who have no idea what to do to help themselves, let alone help the world.
All in all, do I think it’s worth it? Absolutely. Are there ways these billionaires could be sure their children are taken care of, while still making them work for it? A resounding yes to that, as well.