Category: asking for wealth

Why do the rich give after they exit their ventures?

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Entrepreneurs acquire enormous wealth after exiting their businesses through sales, IPOs or liquidation. But what happens after they exit their ventures?

In a study, “After the harvest: A stewardship perspective of entrepreneurship and philanthropy,” in the Journal of Business Venturing (2017), authors Blake D. Mathias, Shelby Solomon and Kristin Madison found 4 key reasons why the rich redistribute their wealth after exiting successful ventures.

  1. Intrinsic motivations: They want to do meaningful work after making large amounts of money.
  2. Identification: The rich want to have a sense of identity and advance a cause they believe in.
  3. Personal power and long-term orientation: They crave for an opportunity to influence future generations.
  4. Stewardship norms: Most feel they have a sense of obligation to give back.

This award winning study analyzed “The Giving Pledge” letters of 99 entrepreneurs and separately conducted in-depth interviews with 19 of them. In 2017, when the study was conducted, there were 142 individuals, 70% of whom were entrepreneurs who had signed on to the “The Giving Pledge.”

Today, there are over 200 individuals from 23 countries who are part of the “The Giving Pledge,” and have committed a majority of their wealth to philanthropy or charitable causes.

The study found that the rich display an innate responsibility to “act as stewards of their communities.”

And, this is very evident in the way latest entrants to “The Giving Pledge” like MacKenzie Bezos have committed to pledging over half of the $36 billion she inherited in Amazon stocks. “I have no doubt that tremendous value comes when people act quickly on the impulse to give. No drive has more positive ripple effects than the desire to be of service,” she says in her Giving Pledge letter.

“In addition to whatever assets life has nurtured in me, I have a disproportionate amount to share,” Bezos adds.

This reminds me of a well cited Princeton study “High income improves evaluation of life but not emotional well being,” that showed the world that anything beyond a $75,000 annual income will not buy you emotional well-being. Authors Daniel Kahneman and Angus Keaton found that emotional well-being rises with income but anything beyond $75,000 is not going to buy you happiness.

However, for those who have made so many more multiples than $75,000, their entrepreneurial exits, often called harvests, trigger their ability to give.

And, social expectation will prompt them to give, be good stewards of society and perhaps buy a little happiness on the way. But one thing is very clear: it is insanely difficult for the mega rich not to give!

Making the ask at 35,000 ft: How Emirates does it.

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Can you make an ask at 35,000 ft?

On a recent international flight on Emirates Airlines, the flagship airline of the Dubai government, the pilot asked charitable support from passengers like me to give to the Emirates Airline Foundation, a non-profit charity. This is, despite forking out a fare that could get me a used car or  feed over 200 hungry people  back in the United States.

Airlines sell credit cards, offer miles, nickel and dime passengers with excess baggage fees and push stuff. Emirates does all this and adds philanthropy to the mix. “Please give us your donations in any currency so that your funds can go towards supporting the Emirates Airlines Foundation,” the pilot announced at the beginning and the end of the flight. And of course, the customary thank you. They remind passengers to put your donations, however small and in any currency in an envelope and pass it on to the cabin crew.

The Emirates Airline Foundation supports children’s needs and does worthwhile projects in India, Bangladesh, Zimbabwe and Ethiopia, to mention a few. Their mission is to support humanitarian organizations around the world working to improve the lives of children in need. Donations are  accepted in any currency and they use 95% of the funds to provide direct support to entities working to help children in need.

Passengers can also donate their miles that can later be used to fund travel for doctors, engineers and other volunteers working on humanitarian missions worldwide. You can also buy a signature Mont Blanc pen for $788 and Emirates will contribute 20% to the Foundation.  This is obviously targeted at the wealthy sheikhs traveling in first and business class across the Middle East. They might buy one just to sign up the customs form.

I was thoroughly disappointed at the quality of the ask at 35,000 ft as it was similar to a pilot announcing the weather. In the two routes I took, the ask came in between the pilot asking you to fasten your seat belts or thank you for taking the 14.5 hour non-stop flight. At this stage, my only thought was to jump out of the plane and not put loose change in an envelope to save the world.

We may soon see airlines hiring “flying fundraisers,” who at 35,000 ft could make a direct ask at passengers in first and business class. With tactful prospect research on the wealth profile of those occupying those seats, making an ask in the skies might just be a fun gig.

However, pitching philanthropy to the economy class. might be a tough ordeal. My Seattle-Dubai flight that I  fondly christened The Curry Express was filled predominantly with Indian techies, their wailing new borns and care-giver parents who were just waiting for the 14.5 hour ordeal to end.

I do not think anyone got the concept and I did not see any loose change going into envelopes.

Emirates has tactfully promoted the program internally through their information and entertainment channels. On The Curry Express, perhaps I was the only one who watched these out of curiosity.

The rest tuned in to Hollywood or Bollywood.