America's Looming Philanthropic Revolution
By Paul G. Schervish, director, Center on Wealth and Philanthropy, Boston College

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As the director of the Center on Wealth and Philanthropy at Boston College, Paul G. Schervish has been researching charitable giving, wealth, spirituality, and philanthropy for more than two decades. Much of Paul's research focuses on charitable giving and volunteering; the Center focuses more broadly on the forms, trends, and motives surrounding the meaning and practice of care in our contemporary age of affluence.

To provide some historical perspective, Paul offered highlights from an essay published in 1930 by John Maynard Keynes, the well-known British economist revered as one of the fathers of macroeconomics. In writing about the economic possibilities for his grandchildren, Keynes predicted that, by the next hundred years, for whole groups of people, whole classes of people, the economic problem of scarcity will have been solved. There will be whole groups and classes from which the issues of how to accumulate more wealth will no longer be, and the primary question will shift to how to use wealth as an instrument.

According to Keynes, if economic acquisition and the growth of wealth is not the real permanent problem of the human race, then something else must be the driver. Keynes felt that this "something else" is a new code of morals, a new way of life, and a new spirituality by which people will attend to their wealth as an instrument for deeper purposes. Keynes stated that this new code of morals would involve living "wisely and agreeably and Following is a summary of comments shared by Paul G. Schervish at the GenSpring Family Offices 2007 Family Symposium, October 30, 2007, Philadelphia, Pennsylvania.well" with the wealth that technology and compound interest have won for us. To Keynes, part of that living wisely, agreeably, and well is how to maintain economic purposefulness for one's neighbor; how to continue to try to use wealth as an instrument to advance one's neighbor when it ceases to be economically purposive for one's self.

With Keynes' observations as a historical backdrop and using data from current and previous research projects, Paul shared his insights into the patterns and motivations of charitable giving and addressed the philanthropic revolution on the horizon. He framed his comments in the context of the "4 Ms" of wealth: Money, Meaning, Morals, and Moral Biography.

Money

From 1950 to the present, a timeframe that includes nine recessions, the real annual rate of growth in wealth has been greater than 3.3 percent. In 2001, there were approximately 7,000 households with wealth greater than $100 million. In 2004, the number of high worth households had grown to an estimated 10,000 households.

There are now close to 11,000 households with net worth in excess of 100 million. There are 115,000 households with a net worth greater than $25 million.¹ What once belonged to an isolated class of industrialists, lords, and nobles now belongs to whole groups and classes of people as a result of earnings and inheritances.

Paul suggested that this exponential growth of wealth has created the need for a new code of morals that has yet to be discovered but is necessary to ensure that current and future generations live wisely, agreeably, and well in conjunction with wealth.

From Paul's perspective, establishing an understanding of the meaning of giving, one's motives for giving, and how one's moral biography influences their giving provides a pathway to greater meaning and fulfillment for wealthy families.

Meaning

According to Paul, there is an ever-increasing emphasis on the unity of life, the ability to create a world of joy and comfort in harmony with our fellow human beings and the planet we inhabit. This sense of unity, of belonging to and making better the world in which we live, gives meaning to our philanthropic efforts. As an example, Paul referenced the meaning of the name of the city of Philadelphia. Literally translated, Philadelphia means "the city of" and "brotherly love." Compare this with the term philanthropy, which we translate to mean "the love of human kind." What happened to the brotherly aspect?

Paul asserts that "philea," the root of philanthropy is a special form of love: what Aristotle refers to as friendship love of mutual nourishment.

To rebut the notion that formal philanthropy may not be the greatest thing one can do in life, Paul suggested that we look at philanthropic activity prior to the introduction of tax deductions. After all, tax-deductible contributions to an IRS-defined nonprofit sector have been in existence for barely a half-century. What was the good that people were doing with their lives before there was so much wealth? What were people doing with their lives before they became wealth holders? Was any of that activity less meaningful because there was no financial benefit?

We were raised in an era where there was a sense that wealth was limited. It wasn't growing. The wealth that somebody had was necessarily exploited from somebody else. In terms of giving, it was a distributional ethic rather than a productive ethic.