On the Sociology of Wealth
The wealthy are caught in the high-beam headlights of toxic rhetoric around equity, inequality, greed, power, excessive affluence, and influence of the wealthiest 1%, and the anger these issues have generated in the U.S. That this has become a hot issue in the current political circus is an understatement, and it will persist long after the 2016 presidential election has been decided.
But this is hardly new. The love-hate relationship with wealth in the U.S. has ebbed and flowed throughout this country’s history. The public view of philanthropy and of its influence on government and public policy has been turbulent ever since the era of Andrew Carnegie and John D. Rockefeller – two men who were vilified for what was perceived as ruthless action in the creation of vast wealth, yet who went on to establish remarkable philanthropic legacies that continue to be models of transformation, positive social impact, and how private wealth can in fact be invested for the common good. As Frank Karel, who brilliantly led communications for both the Robert Wood Johnson Foundation and the Rockefeller Foundation, famously said, “Philanthropy does not rest easily on the bosom of the American society.” And it does not.
The “why” of all this is hugely complex, but is rooted in the dramatically increasing division between rich and poor, both in the U.S. and globally. The rising tide has not lifted all boats. Median household income, adjusted for inflation, is lower now than it was in 1999 (1). Persistent poverty remains a reality for 11% of Americans. It simply is harder today for many in the U.S. to make a living and support a family.
So what, then, are realistic responses from those with wealth – the families and individuals who are in the 1%, including those whose wealth is nowhere on the scale of the very wealthiest? The actions of any one family or individual would not influence what is such a complicated economic and political issue, but, collectively, responsible action by those with wealth could, over time, be a great positive influence. How do we move from toxic rhetoric to substantive dialogue on the moral and ethical dimension potential for wealth in our society?
In my view, which is based on the nearly 30 years of experience working with hundreds of donors at The Philanthropic Initiative, there are some practical questions that could become the basis of discussion and action for families and individuals alike:
- How do our values and passions drive our definition of “wealth with responsibility”? What guiding principles would help us be true to ourselves?
- What public persona do we have today, and what do we wish to present to the outside world in the future? How do we become more intentional in communicating that public persona to those around us?
- How do we truly engage in the broader world? What does engagement mean in terms of commitment – of our time, talent and experience, contacts and networks, financial resources? How will our engagement change if we succeed in maintaining a “beginner’s mind” – an attitude of openness and a lack of preconceptions?
- What role does strategic philanthropy play for us? How do we integrate our values and principles into a comprehensive approach, including our investment philosophy and policies? How expansive a role should social and impact investing play?
- How do we measure and evaluate whether we are successful in these objectives?
Could this become a movement? The Giving Pledge encourages billionaires to commit half or more of their wealth to society. There continues to be a growing number of high-profile examples of individuals – Pam and Pierre Omidyar (founder of eBay), Jean and Steve Case (co-founder of AOL), Priscilla Chan and her husband, Mark Zuckerberg (founder of Facebook) and many others – who have made major commitments based on their own answers to these kinds of questions.
Why do this? For me the answer to the “why” question is that the leverage of passion, will, creativity, and wealth has the most untapped potential to make the world a better place. There is no higher aspiration for any generation.
(1) Tyler Cowen writing in Foreign Affairs, Is Innovation Over, March/April 2016
The above was adapted from to an address to the Ascent Capital Management team. Ascent is a division of US Bank whose clients have assets under management in excess of $75 million. Peter Karoff is a member of the Ascent Board of Advisors and founder of The Philanthropic Initiative.