The new (radical) rich who can’t wait to give away their fortunes
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
In 2006, Farhad Ebrahimi underwent a life-changing moment. Fresh from a degree in maths and computer science at the Massachusetts Institute of Technology, the politically active, punk-loving son of an Iranian father and Cuban mother set up a foundation from money given to him by his parents.
Almost immediately, he set about thinking how best to give away the $70mn-plus he had inherited.
“When I inherited the money, my instinct was, like, ‘I shouldn’t have this’,” he says. “The money never felt like mine, so there was never a part of me thinking: ‘I should just hold on to most of it’.”
It took 18 years but Ebrahimi has, now, finally achieved his objective. Last November, the 46-year-old, who has made his home in Los Angeles, wound up the now-assetless foundation he set up as a newly minted multi-millionaire.
Up until then, Ebrahimi’s Chorus Foundation had funded grassroots organisations from historically disempowered and marginalised communities, with a particular focus on those most impacted by the fossil fuel industry.
This practice of “spending down” a fortune is rare, but not unprecedented among very wealthy individuals. Bill Gates, Warren Buffett, Elon Musk, Larry Elliot, and Mark Zuckerberg are just some of the well-known billionaires who have pledged to give away the bulk of their wealth.
But Ebrahimi’s approach represents a new, and very different, take on this kind of philanthropy. First, there is a greater sense of urgency. A protracted, go-slow timescale for giving might have served in the past, he argues, but not in a world facing a nexus of existential crises.
This belief in the imminence of disaster, and the imperative for immediate action, chimes especially with young wealthy individuals, given their “very explicit” exposure to popular movements, such as Extinction Rebellion and Occupy Wall Street, he explains.
It is a viewpoint echoed by Yahya Alazrak, the 33-year-old executive director of Resource Generation, a US membership organisation that supports wealthy young adults in the “egalitarian distribution” of their financial assets.
As Alazrak puts it: “We are really looking down the barrel of climate catastrophe, right? So, the old conservative wisdom of, you know, ‘spend the first 60 years of your life building wealth and then be philanthropic right at the end’ . . . those sort of time horizons just don’t work anymore.”
The level of eco-anxiety felt by today’s emerging generation of philanthropists should not be underestimated, affirms Martin Raymond, co-founder of the Future Laboratory, a trends forecasting agency.
For those coming of age in an era of climate catastrophe, political upheaval, and global pandemics, the amount of money that a person has in the bank is immaterial: their ill-ease, he believes, remains just as genuine.
In the Future Laboratory’s new report, Generations: Now and Next 2024-2025, today’s young adults are described as being “burdened” by the “polycrisis they’ve inherited”. Almost three-fifths of 16-25 year-olds are currently “very or extremely worried” about climate change, the report maintains.
There’s also an element of cultural zeitgeist, here. Shifts in the “social-cultural space” are quickly normalising questions of social and environmental justice, Raymond says — making wealthy young people “much more comfortable” about topics such as climate and gender that were once highly politicised.
“What we now gather around us, to reflect our sense of positioning in the world, is more about social, cultural, moral issues than it is about competitive, commercial, or corporate attributes,” he explains.
Radical politics — invariably of an anti-capitalist hue (Ebrahimi, for example, readily advertises his ties to the Occupy Wall Street movement) — is another defining characteristic of the ‘give-it-all’ inheritors.
As a consequence, they find wealth creation inherently problematic. In echoes of French economist Thomas Piketty’s landmark book Capital in the Twenty-First Century, they see large-scale capital accumulation as the result of structural inequalities within our “extractivist” economy.
Inherited wealth is no easier to accept. In the US, where the indigenous and Black rights movements have done much over recent years to bring questions of historic legacy into the popular consciousness, this discomfort is all the more acute.
Morgan Curtis, a British-American based in California, has developed a course specifically aimed at those coming to terms with receiving sizeable inheritances.
She speaks from personal experience. Investigating her own family history revealed an ancestor who had been complicit in forcibly displacing a First American community from their native lands in the country’s south-east.
Deciding how to respond to the historic harms “caused by our people, in our name”, as Curtis puts it, occupies the other main aspect of her course.
For many wealthy inheritors, it’s a conversation that explores their need for “reparative action”, she says: “People find that, the more they know about where their money came from, the more specific the pathways are for a response.”
In Curtis’s case, her response has been to channel $600,000 from an inherited wealth fund into a land purchase scheme run by the First American community that her forebear dispossessed.
However, for others, the causal link is rarely so direct. San Francisco-based heiress, Regan Pritzker, for instance, is herself part of a family that experienced historic injustice: her great-grandfather fled to the US in the wake of anti-Jewish pogroms in Kyiv at the end of the 19th century.
But that hasn’t stopped the 51-year-old descendent of one of America’s richest families — the Pritzker Group is a majority owner of the Hyatt hotel chain, among dozens of other companies — struggling with the “unearned” nature of both her “wealth privilege” and her “white privilege”, she says.
Over the years, her reading of structural socio-economic inequality has sharpened. The gap between the “haves and have nots” that helped foster her family’s wealth is now, she argues, feeding into destabilising events, such as the pending climate breakdown and the global rise in authoritarianism.
As with Curtis, this realisation prompted a pathway towards repair. In 2019, Pritzker pledged $450mn — a “significant proportion” of her inherited wealth — to the Kataly Foundation, a charitable fund she co-founded to help empower Black and Indigenous communities, and all communities of colour.
Part of the explicit mission of the Kataly Foundation is to “redefine wealth” in a way that links private capital to social transformation, rather than — as she sees it — to social reproduction.
Hence, her foundation’s grant-making strategy. This includes a 10-year spend-down commitment, a preference for long-term relationships with grantees (to keep them from going back to donors), and a focus on projects that advance “shared prosperity, self-determination, and power”.
“We’re saying [that] we need to change every system in society to get to a place where we are living in harmony with each other, and the planet,” Pritzer argues. “And charity is not going to get us there. We actually need to lean in to changing systems and structures.”
Charity, like wealth, is another point of tension for this new wave of politicised givers. In placing all the decision-making authority in the funders’ hands, traditional philanthropy is seen as perpetuating the very power imbalances deemed problematic.
Marlene Engelhorn is one of those looking to break the old mould. A descendent of the founder of German chemical group, BASF, the 31-year-old heiress recently committed to give away almost the entirety of her estimated €28mn inheritance.
Rather than cherry pick her own favourite causes, Engelhorn has set up a citizens’ assembly in her native Austria to determine how her money should best be dispersed. Picked from randomised addresses, the 50-person assembly is set to come up with a list of recommendations in early June.
“I’m really curious how this model will develop,” says Engelhorn, who is also co-founder of Tax Me Now, a campaign to increase taxes on private wealth. “I’m not really even part of the team anymore so, like everyone else, I have to look at the news to see what’s going on.”
Paolo Fresia takes a similar attitude. Heir to the proceeds of a successful family-owned beverage business in Italy, the 35-year-old London resident has committed to spend down his seven-figure fortune at a rate of 2.7 per cent per year.
He squirms at the notion of “giving back”, both for its presumption of virtue on the part of the giver (he prefers justice to virtue) and its connotations with patronage.
Where there’s patronage, there’s power, he reasons. Hence, his support for a Berlin-based funders’ network called the Guerrilla Foundation, which provides grassroots activist groups with long-term funding to invest as they see fit.
Not only is it logical to cede decision-making power to those who are “closer to the problems that we see in the world”, he says; but also, in ceding that power, wealthy donors can make a deliberate break with the origin of their privilege.
While this new breed of anti-wealth inheritor remains small, its numbers are growing. Resource Generation, for instance, counts more than 1,100 active members in its network. Nor is it alone. Other groups in the “wealth redistribution community”, such as Solidaire, Justice Funders, and Resource Justice, all report a growth in inquiries.
To service them, a network of advisers is now emerging. Some offer psychological and emotional support to young inheritors struggling to balance family expectations and social pressure, on the one hand, with their personal values and progressive politics, on the other.
“Dissonance” and “guilt” are two terms that crop up frequently for this class of individual, says Jessica McGawley, a consulting psychologist who works exclusively with second or third-generation wealth holders.
“It’s difficult for people outside this group to have much empathy for them because they supposedly hold the golden chalice to all of our problems,” she explains. “But, for some people, it [inherited wealth] is a tunnel, not a runway.”
The wealth management industry is not without sympathetic advisers, either. Far from helping their clients grow their pot, intermediaries in this unorthodox niche offer advice on how to deploy private assets for social or ethical impact.
“Clearly, most people who have inherited tens or hundreds of millions of dollars don’t give it all away,” says Zach Teutsch, a managing partner at Values Added Financial, one such socially-minded financial advisory firm based in Washington DC.
“But those who do have gone from being unheard of to merely unusual,” he adds. “Which is, actually, a huge change.”
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment.
This article was amended to make clear Farhad Ebrahimi was heir to his family’s assets before 2006. In this year, he used money passed on to him by his parents to set up a foundation. The article also incorrectly stated that he made his home in a first-nation community [for indigenous peoples] in Los Angeles. Finally, he is not the son of Iranian immigrants. His father is Iranian, but his mother is Cuban.
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