The research shows that successful legacies tend to have a sensible and clear family governance/vision and maintain a stable business across generations. Europe’s billionaire families benefit from significant contributions to society and the economy. Old-wealth families have a common philosophy and understanding of their purpose and values that glues family members together and provides a common identity.
Wealth Transfer
UBS and PwC estimate that 460 billionaires will pass on $2.1 trillion to their heirs over the next two decades. For the younger Asian economies, where more than 85 percent of billionaires are first generation, this will be the first intergenerational wealth transfer.
What are the implications? According to the report, the new generation’s values are broader and choices greater. Millennials may choose personal careers over working in the family business, or philanthropy over entrepreneurialism. This is likely to influence the structure and type of legacies established. Many billionaires may cash out. Those who choose to keep their businesses have heirs who are increasingly likely to become owners, not managers.
After 35 years’ growth of wealth, billionaire philanthropy is expanding across the globe, with potentially significant benefits for society and the environment. New giving models—including impact investing, loans, contracts and guarantees—are coming to the fore, and millennial billionaires are putting philanthropy at the heart of their family values.
The report notes, however, that a strategy gap could limit the effectiveness of this generosity. Many donors struggle between following their passion and thinking strategically about its potential benefits. Many also have yet to adopt best practice in measurement.
In addition, few are willing to take the risks and adopt a longer-term view that the problems they seek to solve require. As well, many want to shape programs themselves, overlooking that the most complex problems can be solved only with cooperation and cross-sector approaches.