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March 16, 2021
Not always what it seems
There comes a point when wealth beyond a certain level acquires a super-charged momentum of its own, taking the high net worth individual into a world of super-rich and beyond. As a society we tend to treat these individuals with an unusually high level of deference, awestruck by their ‘wisdom and insights’ into the problems of the world. Notwithstanding that the source of their wealth doesn’t always bear close scrutiny, their philanthropic activities which we seem to accept without question, are not always what they seem. New research from Bath and Newcastle Universities makes for interesting reading.
Large-scale giving by the super-rich has done almost nothing to redistribute wealth from rich to poor and could be perpetuating social inequalities, according to new research.
Researchers at the University of Bath School of Management and Newcastle University Business School found that giving by the super-wealthy had failed to significantly benefit poor countries in the developing world, contrary to popular belief.
The study, Elite Philanthropy in the United States and the United Kingdom in the New Age of Inequalities, reveals that giving by wealthy individuals helped to preserve social inequalities while paying considerable dividends to donors in the form of privilege and influence in society and politics.
It highlights how funding frequently comes with strings attached, with the super-rich able to pursue personal and political agendas through major charitable foundations.
It also allows individuals to use their financial clout to influence governments and the educational institutions that attract a major proportion of high-end donations.
Researchers identified several incentives for elite philanthropists, including the amassing of “social and cultural capital” – for example, receiving honours such as UK knighthoods for their services to charity.
Viewed in this light, researchers said, donors could effectively buy their way into circles of influence and networks.
Tax advantages also play an important part, and researchers found that attempts to reform the tax issue – such as a cap on tax relief on donations – had failed in the past because philanthropists had almost universally opposed any changes to the system.
Professor Mairi Maclean, of the University of Bath School of Management, said the findings could be difficult for people to come to terms with.
She acknowledged that some very wealthy people had given away sizeable parts of their fortunes, but said the research showed that most of their peers had not, with combined donations amounting to only a small percentage of the total wealth of the super-rich.
“The fact is most super-wealthy people give very little relative to their means,” she said.
“We do accept that many elite philanthropists act sincerely to improve the lives of others, but we suggest that altruism alone does not explain their actions.
“It is far more likely that philanthropy yields substantive rewards beyond the emotional satisfactions of beneficence – and our research bears this out.”