“To make life a little better for people less fortunate than you, that’s what I think a meaningful life is.” These are the words of the late Ruth Bader Ginsburg, US Supreme Court Justice – who was a firm believer that it is the duty of the more fortunate members of society to offer a helping hand to others. The ‘Notorious RBG’, as she became known, did not just gift considerable time to the causes she supported but also significant funds, which she donated to dozens of nonprofit organisations, such as her US$1 million prize for philosophy and culture in 2019 from the Berggruen Institute, an independent think tank.
But not everyone feels this way. Some are firmly of the opinion that this is the role of government and their wealth is for them and their family, and should not to be used to try and correct the world’s ills. They – perhaps inadvertently – follow the thoughts of the 20th century political philosopher, John Rawls, who argued that citizens discharge their moral responsibility when they contribute their fair share of taxes, which the authorities then collectively use to take care of the poor and vulnerable using the greater level of resources at their disposal. The better-off, he believed, are then free to dispose of the rest of their income as they wish.
A number of factors may influence people’s thoughts on this subject, including how they might give back and to whom.
Sources of wealth can contribute to how people feel about giving back – such as whether wealth has been a key driver of their career or, instead, a happy by-product. And there are other aspects too that influence financial decisions, for example whether you want to use your wealth to collect art or build a collection of other treasures – which could be donated to a national institution and, therefore, posthumously see you labelled as a philanthropist – or if you want to focus more on experiences.
Nationality can also be a differentiator, too: individual giving in Belgium, Germany and France is said to be rising, while in Spain, the Netherlands and the UK, it is declining. Family history, personal values and even religious beliefs can also greatly impact how people behave when it comes to philanthropic endeavours.
Historically, for example, some wealthy individuals donated due to their Christian duty and charity was seen as a way to ‘save one’s soul’. And contemporary philanthropy was present in Tudor times – a way of thinking that became increasingly popular from the 19th century. This is when a number of well-known charities that still operate today, such as the St John Ambulance Brigade and the Salvation Army, were formed. It was also around this time that financier George Peabody, widely regarded as the father of modern philanthropy, founded the housing association, Peabody Trust, which still owns and manages 67,000 homes in London and the South East of England.
Some people, however, believe that some philanthropists are driven by ulterior motives. One school of thought, for example, suggests that Scottish-born American industrialist Andrew Carnegie could have used his fortunes to increase the wages of his underpaid staff, instead of setting up his numerous foundations.
Even once you have decided to give, there is still a question around the destination of the donations and, once again, a range of considerations can come into play. Some families may have historic links to causes, while others may find the outcomes sought by organisations chime with their personal experiences or emotional connections. The COVID-19 pandemic, in particular, has been an interesting lens through which to view this. The pandemic, as with many other areas of our lives, has prompted many people to examine, and even completely rethink, their current attitudes to social responsibility versus taxes. This is demonstrated in the recent news that 100 millionaires and billionaires signed an open letter aimed at authorities (and other elites) demanding that they be taxed more.
Whatever your current thoughts or feelings on ‘giving back’ to society, it’s still worth considering philanthropy – not least as the desire to donate might only flourish when the perfect opportunity for you presents itself. Or, you may find there is a cause that an immediate family member wants to support that resonates with you too.
As such, the best place to start is with an open and honest conversation with your loved ones, which could follow the outline below:
You can also decide that you aren’t ready, or able, to do any of this yet. Perhaps it may never be on your radar. But even acknowledging this is a good first move.
And, if you’re unsure where to start or need guidance facilitating a family conversation, please involve our wealth planners, who are well-versed in such discussions and who have considerable experience, working alongside your private banker, to guide your initial steps in an approach that is tailored to your circumstances.
By sitting down and discussing the purpose of your wealth, whatever this may look like, you’re also more likely to define your own position when it comes to social responsibility and whether you actually want to have an impact – which doesn’t have to be sizeable. Any contribution can make all the difference in the world to a chosen cause or individual. Because, in the words of Bader Ginsburg, “Real change, enduring change, happens one step at a time”.
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Any examples of investments and structures used are for illustrative purposes only. The inclusion does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.
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