In our work with highly successful clients, we have seen close-up how wealth has its own set of problems. It is easy to understand how wealth makes life easier, but just how does it make life more difficult? That’s what Center on Wealth and Philanthropy at Boston College set out to study.
While most surveys of wealthy people ask them about which luxury goods they want to purchase, Robert Kenny and his colleagues wanted to ask more personal questions about their hopes, challenges, and life philosophies.
Their top three concerns echo Marigold’s research and observations. Here is an overview of what they found:
Being a good parent was the most frequently mentioned aspiration in life for Kenny’s research participants. Wealth contributes to the ability of parents to provide security, afford good schools, travel and offer other diverse life experiences. But unexpected by the researchers was the sheer volume of responses they received to the question of how wealth got in the way of good parenting. Concerns about how their children would be treated by others were predominant:
Would they be stereotyped as “trust fund babies?”
Would they ever know if people loved them or just their money?
Would they feel they deserved their achievements or simply had collected the advantages of their privileged lifestyle?
What would motivate them to lead a meaningful life?
Raising children in a world of wealth complicates the already difficult task of parenting. And with so many high-profile media reports of wealthy kids gone wrong, it is easy to see why they worry.
As wealth increases so does isolation. We know that isolation is one of the most detrimental influences on our sense of well-being. We need relationships to survive. What is more, we seem to have a basic drive for them. Psychologists, sociologists and theologians find that human beings have a fundamental need for inclusion in group life and for close relationships.
Common sources of social support are often unavailable to the wealthy for a variety of reasons. They have what everyone else wants, which can mean that they have a greater need for security to protect what they have. Often they end up erecting boundaries to protect themselves, their family and their property.
Even their friends and family may treat them differently as a result of their wealth. Some may expect to get a share of their wealth. Others may be intimidated and feel unable to “keep up” with their lifestyle so they cut off or create distance in relationships. When the wealthy family needs support, they often get the message that because of their wealth, no one takes their problems very seriously.
As a result of these difficulties, wealthy people may migrate to neighborhoods and communities of others in a similar social class. In a sense they become part of a (classy!) ghetto. This may change their worldview, values and sense of identity, further isolating them from their family and old friends.
3. Burden of Responsibility
While wealth expands freedom of choice, that same freedom can be overwhelming. Especially for those who take their responsibility seriously, deciding how to best use their abundant resources can be paralyzing. Wealthy people are frequently besieged by numerous competing causes and organizations, all apparently worthy. How can they be sure that their hard-won money will be used appropriately?
Philanthropy requires a unique set of competencies that include deciding when and how much to give, setting priorities among competing needs, assessing quality of potential grantees, setting up appropriate financial and legal vehicles for giving, managing the ongoing relationship with grantees, and tracking outcomes. All of these skills require expertise. Developing this expertise takes time and education.
Heather Tuininga, our marigold philanthropy expert will be writing some blogs on this topic in the near future. In the meantime, we can see evidence of this from Warren Buffet who famously gave his money to Bill & Melinda Gates because he was confident that they had developed the competency to give money away well. He explained,
“I don’t think I’m as well cut out to be a philanthropist as Bill and Melinda are. The feedback on philanthropy is very slow, and that would bother me. I’d have to be too involved with a lot of people I wouldn’t want to be involved with and have to listen to more opinions than I would enjoy. In philanthropy also, you have to make some big mistakes. I know that. But it would bother me more to make the mistakes myself, rather than having someone else make them whom I trust overall to do a good job. In general, Bill and Melinda will have a better batting average than I would.”
Francis Bacon is given credit for the proverb, “Money is a good servant, but a bad master.” Of course, money is important for life, but it doesn’t solve all problems. At the end of the day, no matter what our wealth, we still have to grapple with our humanity and the needs it presents. Preparing the next generation, connecting with others and being able to contribute to the common good are essential to a good life regardless of our bank balance, but these can pose particular challenges for those with wealth.
In upcoming weeks we will look at these issues more closely and provide supportive resources in each of these areas.
What aspect of wealth do you find most complicating? Please leave your comments and questions below.
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