Young and Wealthy and Giving It Away
June 26, 2006 — -- The rich don't give their money away like they used to.
Unlike their predecessors, today's multimillionaires don't wait until retirement to donate much of their vast wealth, and they are much more involved in how their money is put to good use.
Since the dot-com and tech boom of the late 1990s, philanthropy has become a younger industry. With this younger demographic has come a whole different culture of philanthropy, according to experts.
"What has happened in the last 10 years or so since the dot-com boom is you have young entrepreneurs who have created a lot of wealth and created foundations and philanthropies at a much younger age and they have gotten much more involved in their foundations," said Todd Cohen, editor of the Philanthropy Journal.
Partly because it is no simple task to figure out how to spend $1 billion, many of today's megadonors are not content to simply write the checks.
"The biggest thing that holds people back from deciding how to give their wealth is that they worry about what the money will be used for if they donate it to an organization," said Peter Karoff, chairman and founder of the Philanthropic Initiative.
While industry titans like J.D. Rockefeller and Henry Ford created charitable foundations at the ends of their careers, Cohen says that Bill Gates and other baby boomers and even Generation X-ers who made their fortunes young have started foundations at a much younger age.
This trend has also been affected by a skepticism born out of the 1970s and 1980s when high-profile institutions were in the news for not spending their money as they had pledged to, Karoff said.
"Some people feel they are stewards of their money," Karoff said. "It's what Andrew Carnegie meant when he said, 'A rich man who dies is a bad person.'"
Carnegie, called in his era the "Richest Man in the World," started several philanthropic institutes of his own.
He also wrote "The Gospel of Wealth," an essay about the perils of allowing large sums to be passed on to persons or organizations ill-equipped mentally or emotionally to cope with them.
"The biggest thing that holds people back from donating their money is worrying that the money will be used properly," Karoff said.
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