By Hank Goldstein, Director Oram Group, Inc.
THE GREAT WEALTH TRANSFER
Seems it's been put off another 15 to 25 years. I always found these estimates a squirrely business, way too dependent on fragile economic assumptions as indeed was the case in 2007-8 when the economy collapsed. We are now in another high tech bubble. All the pumping and dumping of stock in companies with no profits, directed by naughty high testosterone guys who should have never been allowed to leave the principal's office.
Also the banks are back in the sub-prime business. Mostly because no CEOs went to jail. This time at least a few banks will not be too big to fail. I live more on my investments than on any other source of income. I want the market to succeed. As do you all.
Takeaway: Forget the wealth transfer; concentrate on getting the wealth that's already provably there.
PHILANTHROPY'S GREATEST MYTH
The myth: The rich are generous.
The fact: Taken as a class, the rich are cheap by any measure and not giving anywhere near capacity.
For all the publicity generated and garnered by Buffett, Gates, Zuckerberg and others who have taken the pledge, there is a much larger sub-class of one percenters with even more aggregated wealth who've done no such thing. Charitable giving still hunkers at a constant plus or minus 2% of GDP regardless of absolute dollars. That hasn't budged since records began. Money is pouring into donor advised funds that offer an immediate tax deduction and safe parking forever. Foundations are sitting on half a trillion dollars in tax forgiven cash. Who is that helping?
The growing economic inequality of this nation is well documented. The poor and the near poor (once the middle class) are said by some economists to be increasing in number. But, for sure, payrolls remain flat. Government funds have been taken away from charitable enterprises. Whether that money will ever come back is problematic at best. Philanthropy cannot make up the difference in lost government money. And philanthropy does not reach the poorest people who need it the most. It benefits the middle the most and its benefits are skewed toward charities who serve them, not that it shouldn't. Each year's list of gifts at $100 million and up go primarily to higher education and health care. The only real exception I can think of was Joan Kroc's multibillion dollars to Salvation Army.
Takeaway: The rich, by and large, are not generous.
The Giving Institute can and should be seeking to advance philanthropy globally. Those of us who come from outside the U.S. and those of us who have served charities internationally recognize that the profile of philanthropy and world demographics are changing rapidly. I was an early incubator of Giving Tuesday (GT) whose Thomas Edison - Henry Timms - will be with us in Vancouver. He's told me and my students that one of the major challenges for GT now is how to take it global. And that's the challenge for all of us.
Though U.S. giving may still be the world's philanthropic driver, this is not necessarily a permanent condition, as the global economy increasingly displaces the purely domestic. In my view, The Giving Institute can be the deus ex machina here, get it started, and then get out of the way. My vision is patterned on One World Alliance, a congeries of airlines who code-share, cooperate, as well as compete, and generally strive for a more seamless, if far from perfect, travel experience.
Takeaway: www.givinginstituteglobal.org. The domain is available. I own it.