Showing newest posts with label wealth. Show older posts
Showing newest posts with label wealth. Show older posts

World wealth...and a game to hold on to it

Here is the link to Capgemini's recently released World Wealth Report. Some factoids (and my additions in [ ]:

GenSpring has developed a game, called Shirtsleeves to Shirtsleeves, to help those families in the wealth column avoid becoming those families in the [brackets].

Transfer WHAT wealth?

Eight Reasons You Should not Expect an Inheritance (New York Times, June 21, 2008)

For a LONG time now I've been raising questions about the impact that health care costs, retirement (or the lack there of), and living transfers of wealth will have on the much-touted Intergenerational Transfer of Wealth numbers. These predictions of trillion dollar transfers drive things from philanthropic planning to nonprofit growth to private bank activity to the marketing budgets for donor advised funds.

So...what happens if the transfer happens but the money goes to things like housing and education costs? Or if the transfer doesn't happen because it is really expensive to live forever as some baby boomers are planning? The NYT asks this question, and points to eight reasons why inheritance trends may not go the way of predictions.



Recessions, the wealthy and philanthropy

Given the chaos on Wall Street these past weeks, a report on the declining rate of growth in American millionaires may not come as any surprise. But since philanthropy is ever-occupied with transfers of wealth and such, I thought it appropriate to bring to your attention this report from the Spectrem Group:

"The number of Affluent and Millionaire households has continued to grow for the fifth consecutive year. Growth rates have, however, slowed considerably."

For the record, Spectrem's definition of Affluent and Millionaires is those worth $1m or more, not including value of their primary residence. Given housing prices, the value of their homes may not be helping things anyway.

How considerably? Well, millionaires increased in number by only 2% in 2007, having grown in number by 8% the year before, 11% in 2005, and 21% in 2004.

The report still found 9.2 million households and Robert Frank, over at WSJ Wealth Report, notes that wealthy households tend to increase in number even during recessions. He points to data from 2002 that show "the number of millionaires... grew by 2% and their wealth grew more than 3%... The next year, growth was even stronger."

So, what might this mean for giving? Well, if history is any guide recessions will still create millionaires and giving will still increase (though slowly). According to Giving USA, from 2001-2002 giving grew by an inflation adjusted rate of 0.6 percent, from 2002-2003 it grew by an inflation adjusted rate of 0.5%.


YouTube, Blog, SecondLife Davos

If you don't want to spend the carbon credits to get to Davos (never mind the money) you can catch a good bit of the World Economic Forum at:

The Davos blogs

The Blog Aggregator

On GoogleVideo

On YouTube

On the wiki

Via Webcasts and podcasts

And in SecondLife

There are plenty of chances to join the conversation, yell at the panelists, voice your opinion, protest the commercialization of global warming, etc. so do it.


Broadband gentrification

The following quote is from Steven Johnson's blog, citing discussions he had with friends who had just been mugged and were considering leaving Brooklyn. He notes in his post that, while these are seemingly close friends of his, he learned about the mugging via outside.in, one of the "hyperlocal" blogs I noted earlier (and the one Johnson started).

Johnson writes, "Let's start with the fact that the overall wealth distribution problem in the U.S. is not a problem neighborhoods can solve. There are going to be rich people, for better or for worse, and while I think we both agree that the high-low wage ratios in this country are seriously out of whack, that's a whole other question. The question for us is: given that there are going to be rich people, where should they go? Is it better to have them all leave the cities for the suburbs the way they did in the sixties and seventies and live in gated isolation from everyone else? Or is better for them to live -- they way they do even in the fanciest blocks of the North Slope -- within walking distance of housing projects in two directions, and pressed up against a public park that is shared by an amazingly diverse population from every major ethnic/religious/economic group imaginable. Yes, when movie stars and famous writers and people like you and me move into the neighborhood, prices go up and some folks get squeezed out. That's not reason to give up on figuring out ways to preserve economic diversity in city neighborhoods. But I'd rather have the movie stars and bankers taking their kids to the 9th street playground on a summer weekend than having them play in their private backyard pool in Westchester."

A couple of things struck me as relevant for philanthropy.
The Neighborhood Funders Group (nfg.org) is an active and growing affinity group of foundations. Who defines neighborhoods? How does economic diversity fit into their ever-changing boundaries?
One of the books I have in my piles is Off the Books: The Underground Economy and the Urban Poor. I have it because I am interested in how it discusses the 'philanthropy of the poor.' I'm interested in this because I don't think the philanthropy of the rich understands the economies (including the giving and mutual aid) of the poor. Even when the rich and poor are neighbors.
Do the hyperlocal sites like outside.in have any chance of engaging the range of citizens in Johnson's Park Slope neighborhood (or anywhere?). His friend who was mugged blogged about it on his own site and his wife also posted on hers. But what about the mugger's friends? (not that I would expect said person to identify as such). Where - in what form, in what lingua franca, in what ways - are those perspectives being shared and shaped? Our online communities are no doubt as gentrified and economically homogeneous as our suburbs. Left to their own evolutionary paths, they may only further sever ties across classes. Rich kids may still be playing in the city's playgrounds, but their parents are only talking to those with broadband.
Finally, as Johnson's post makes so clear, some people can leave. Others - I would guess the mugger, for example - doesn't have the luxury of debating between Brooklyn or Bedford, Park Slope or New Hyde Park. There is power in having that choice; there can be power in not having it; and we all have the responsibility to know the difference between the two.

Don't get me wrong - I'm not pro-mugger. I've been a crime victim. It is life changing. And I do agree with Johnson - moving isn't the answer. However, simply staying isn't enough.


On the value of human lives, goals, and excuses


Peter Singer, a notably challenging philosopher (he has been described as the world's most "controversial ethicist"), takes on the question of the value of a human life in assessing the philanthropy of the world's wealthiest individuals. The article is in the upcoming NY Times Sunday Magazine (subscription required)

The article shows several things. First, that philosophers can write so that lay people can understand them (I put myself in that latter category, I made it all the way through the argument and followed along just fine - hats off to the editors at the Times). Second, he nicely encapsulates several major Western philosophical analyses for giving - handy and all in one place.

Third, and the most important, Singer goes beyond a clean explication of philosophical questions about philanthropy and does some basic math. The focus of his arithmetic speaks directly to issues of relative wealth and poverty - how much do the planet's wealthiest citizens owe to its poorest? The results (to Singer's own surprise):

"[not until] I calculated how much America’s Top 10 percent of income earners actually make [did] I fully understood how easy it would be for the world’s rich to eliminate, or virtually eliminate, global poverty....I found the result astonishing. I double-checked the figures and asked a research assistant to check them as well. But they were right. Measured against our capacity, the Millennium Development Goals are indecently, shockingly modest. If we fail to achieve them — as on present indications we well might — we have no excuses. The target we should be setting for ourselves is not halving the proportion of people living in extreme poverty, and without enough to eat, but ensuring that no one, or virtually no one, needs to live in such degrading conditions. That is a worthy goal, and it is well within our reach."

My next post will be about "giving without giving" - something which Singer's review of the philosophy of philanthropy also addresses.


Worldwide wealth...and lack thereof

Philanthropists don't like to talk about this issue and certainly we don't seem to be doing much about it. Looking at the enormous gaps in wealth around the world, however, seems to me to be a starting point from which to think about the role of philanthropy in our societies. Great philanthropy, has, after all, been a result of the very forces that also create the disparity.

On December 6th the Financial Times reported that 2% of the world's population owns 50% of the wealth. The poorest 50% of the world's population owns 1% of assets.

To put this in perspective for Americans, in order to be in the world's top 1% of wealth owners an individual must have a net worth of $500,000 or more. That figure, unattainable by most of the world, is less than the median home price in San Francisco and about equal to the average value increase in San Francisco home values since 2000. The average American has a net worth of about $144,000, whereas, globally, an adult with $2,300 worth of assets would be in the top half of the charts.

The data come from a new report released by the World Institute for Development Economics Research of the United Nations University.

How can we hold these figures in our heads when we think about philanthropy? What do the forces that create these gaps mean for the limitations of philanthropy? How can we incorporate this reality into the conversations about markets, philanthropy, and the public sector?