In 2006, Farhad Ebrahimi experienced a life-changing moment. The politically active punk son of an Iranian father and Cuban mother, who just earned a degree in mathematics and computer science from the Massachusetts Institute of Technology, uses the money his parents give him. Established a foundation.
He immediately began thinking about how best to transfer the more than $70 million he had inherited.
“When I inherited the money, my instinct was, 'I shouldn't have this,'” he says. “I never felt like the money belonged to me, so I never thought, 'I just need to have most of the money.'”
It took 18 years, but Ebrahimi has now finally achieved his goal. Last November, the Los Angeles-based 46-year-old dissolved the now-wealthy foundation he founded as a newly billionaire.
Until then, Ebrahimi's Chorus Foundation had funded grassroots organizations in historically disempowered and marginalized communities, with a particular focus on communities most affected by the fossil fuel industry.
This act of “depleting” one's wealth is rare, but not unheard of among the very wealthy. Bill Gates, Warren Buffett, Elon Musk, Larry Elliott, and Mark Zuckerberg are just a few of the famous billionaires who have pledged to give away the majority of their wealth.
But Ebrahimi's approach represents a completely different and new approach to this type of philanthropy. First, there was a heightened sense of urgency. He argues that long, slow timescales for giving may have helped in the past, but not in a world facing an existential crisis.
This belief that disaster is imminent and immediate action is urgent resonates particularly with young wealthy people, as they have been exposed “very blatantly” to popular movements such as Extinction Rebellion and Occupy Wall Street. He explains when he calls.
This is a view echoed by Yahya Alazraq, 33, executive director of Resource Generation, a US membership organization that supports the “equitable distribution” of financial assets among wealthy young people.
Alazrak said: So there's an old conservative wisdom that says, “The first 60 years of his life are spent building wealth, and in the end doing philanthropy.” . . Such timelines no longer work. ”
The level of environmental anxiety felt by today's emerging generation of philanthropists should not be underestimated, asserts Martin Raymond, co-founder of trend forecasting agency Future Laboratory.
For people coming of age in a time of climate change, political upheaval, and a global pandemic, it doesn't matter how much money they have in the bank. He believes their insecurities remain real.
A new Future Laboratory report, Generations: Now and Next 2024-2025, says today's young people are “burdened” by a “huge legacy of crises”. Almost three-fifths of 16-25 year olds are now “very or very concerned” about climate change, the report claims.
There's also an element of cultural zeitgeist here. Raymond argues that changes in the “sociocultural space” are rapidly normalizing social and environmental justice issues, and that once highly politicized topics such as climate and gender of young people said, “I feel much more comfortable now.''
“What we now surround ourselves with to reflect our place in the world is less about competitive, commercial and corporate qualities than social, cultural and moral.” It’s about problems,” he explains.
Radical politics, always with anti-capitalist overtones (for example, Ebrahimi readily touts his ties to the Occupy Wall Street movement) are another defining characteristic of the “all-in” heir. It is.
As a result, they feel that wealth creation is inherently problematic.Reflecting French economist Thomas Piketty's groundbreaking book 21st century capitalthey believe that large-scale capital accumulation is the result of structural inequalities within “extractivist” economies.
Embracing inherited wealth is not easy. This malaise is even more acute in the United States, where the indigenous and black rights movements have contributed significantly in recent years to bringing heritage issues into public consciousness.
Morgan Curtis, a British-American based in California, has developed a course aimed specifically at those who have agreed to receive a large inheritance.
She speaks from personal experience. She researched her own family history and discovered that her ancestors were complicit in the forced eviction of First American communities from her homeland in the southeastern United States.
Deciding how to respond to historical harm “inflicted by our people in our name,” as Curtis puts it, occupies another major aspect of her path. Masu.
For many wealthy heirs, she says, this is a conversation that explores the need for “restorative action.” “The more people know where their money is coming from, the more they realize that their response path becomes more specific.”
In Curtis' case, her response was to funnel $600,000 from her inheritance fund into a land purchase program run by First American Communities that her ancestors had dispossessed.
But for others, the causal relationship is rarely so direct. For example, San Francisco-based heiress Regan Pritzker herself is part of a family that has experienced historical injustice. Her great-grandfather fled to the United States in the wake of anti-Jewish pogroms in Kiev at the end of the 19th century.
But that hasn't stopped the 51-year-old scion of one of America's wealthiest families, whose Pritzker Group is the majority owner of the Hyatt hotel chain, among dozens of other companies, and who owns both of her I struggle with the nature of “passive income.” It's “the privilege of the wealthy,” she says, and her “white privilege.”
Over the years, her perspective on structural socio-economic inequality has sharpened. The divide between the 'haves and have-nots' that helped foster family wealth is now widening, influencing destabilizing events such as impending climate change and the rise of global authoritarianism. , she claims.
As in Curtis' case, this realization prompted a path to restoration. In 2019, Pritzker invested $450 million, a “substantial portion” of her inheritance, into a company she co-founded to empower Black and Indigenous communities and all communities of color. He pledged to donate to the Katary Foundation, a charitable foundation.
Part of the Katary Foundation's stated mission is to “redefine wealth” in a way that connects private capital (in her view) to social transformation rather than social reproduction.
That's her foundation's grantmaking strategy. This includes a 10-year spending reduction commitment, prioritizing long-term relationships with grantees (so that grantees do not go back to donors), and “Shared Prosperity, Self-Determination”. , includes an emphasis on projects that promote 'power'.
“What we are saying is that [that] “To get to a place where we live in harmony with each other and the planet, we need to change every system in our society,” Pritzer argues. “And philanthropy isn't going to get us there. We actually need to lean into system and structural change.”
Like wealth, philanthropy has become another point of tension for the new wave of politicized donors. Traditional philanthropy is seen as perpetuating the very power imbalances at issue by placing all decision-making power in the hands of funders.
Marlene Engelhorn is one of those trying to break out of the old mold. The 31-year-old heiress, a descendant of the founder of German chemical group BASF, recently pledged to transfer almost the entirety of his estimated €28 million inheritance.
Rather than cherry-picking his favorite causes, Engelhorn founded a citizens' assembly in his native Austria to decide how best to distribute his funds. The council, made up of 50 people chosen from randomized addresses, is expected to come up with a list of recommendations in early June.
“I’m very interested to see how this model develops,” said Engelhorn, who is also co-founder of Tax Me Now, a campaign to increase taxes on personal wealth. “I'm not even part of the team anymore, so I have to watch the news like everyone else to find out what's going on.”
Paolo Fresia has a similar attitude. The London-based 35-year-old, a profitable heir to a successful family drinks business in Italy, has pledged to spend his seven-figure fortune at a rate of 2.7% a year.
He balks at the concept of “returning favors,'' both because of the assumption of virtue on the part of the giver (he prefers justice to virtue) and because of its connotation of patronage.
Where there is patronage, he reasons, there is power. That's why he supports a Berlin-based funder network called the Guerrilla Foundation, which provides long-term funding to grassroots activist groups to invest on an as-needed basis.
It's not only logical, he says, to hand over decision-making power to those “closest to the problems we see in the world.” But by ceding that power, wealthy donors can also intentionally sever the origins of their privilege.
This new breed of anti-wealth heirs remains small, but their numbers are growing. For example, Resource Generation's network has over 1,100 active members. It's not alone. Other groups in the wealth redistribution community, including Solidaire, Justice Funders and Resource Justice, have all reported an increase in inquiries.
Networks of advisors are now emerging to serve them. Some provide psychological and emotional support to young heirs who struggle to balance family expectations and social pressures on the one hand with personal values and progressive politics on the other.
“Dissonance” and “guilt” are two words that come up frequently for people in this demographic, said Jessica McGorry, a consulting psychologist who works exclusively with second- and third-generation wealth owners.
“It's hard for people outside this group to empathize with them because they are thought to hold the golden cup for all our problems,” she explains. “But for some people, [inherited wealth] It's a tunnel, not a runway. ”
The asset management industry is not without its kind advisors. Brokers in this unconventional niche go beyond helping clients grow their profits, offering advice on how to leverage personal assets for social or ethical impact.
“Obviously, most people who inherit tens or hundreds of millions of dollars don't give it all away,” says Values Added, one such socially-minded financial advisory firm based in Washington, D.C.・Zach Teutsch, Financial Managing Partner, said:
“But these people have gone from being unheard of to just being rare,” he added. “This is actually a big change.”
This article is part of FT Wealthphilanthropy, entrepreneurs, family offices, as well as alternative and impact investing.
This article has been amended to clarify that Farhad Ebrahimi has been the heir to the family's assets since before 2006. That year, he established a foundation using funds given to him by his parents.The article also incorrectly stated that he made his home in an indigenous community. [for indigenous peoples] In Los Angeles. Finally, he is not the son of Iranian immigrants. His father is Iranian, while his mother is Cuban.
