The self-made rich are more philanthropic than those who inherit wealth

Billionaires who have made their own wealth are more likely to donate substantial amounts of money to charity than billionaires who have inherited their wealth, according to a study published in the Economic Inquiry.

In 2011, Bill Gates, co-founder of Microsoft and co-founder of the Bill & Melinda Gates Foundation, said, "Our experience worldwide is that first-generation wealth is actually more generous than dynastic wealth … Both here in India and [in the] U.S. and other countries, the biggest givers are those who are receivers of first-generation wealth," according to the report.

To verify whether Mr. Gates' observation is true, researchers studied the charitable behavior of the extremely wealthy using data from the Giving Pledge, a global public pledge to give away at least half of one's fortune during one's lifetime. At the time the study was conducted, the pledge had been signed by more than 100 extremely wealthy people. Additionally, the researchers used data on the presence of U.S. billionaires in the Philanthropy Top 50 and in the Million Dollar List, a list of those who have given grants of $1 million or more since 2000.

The study found that compared to billionaires who inherited their wealth, self-made billionaires are three to four times more likely to sign the Giving Pledge or to be present in the Philanthropy Top 50 list of biggest pledges. They are also 28 percent more likely to be present in the Million Dollar List. The researchers also determined that, conditional on giving, self-made billionaires tend to give more to charity than those who inherit their fortunes.

More articles on leadership and management:
Breaking new ground: Q&A with Piedmont Atlanta CEO Dr. Patrick Battey
Parkland Health & Hospital System adds attorney to board
Broward Health board votes to keep meeting on FBI investigation private

 

© Copyright ASC COMMUNICATIONS 2017. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months