The White House recently invited a bunch of rich kids over to talk about how they should spend their fortunes. Oh yes, they did! The event was closed to the media, of course. The rich, whether old or young, don’t tend to like their names disclosed to the press, and the White House probably wouldn’t like to admit that it rolled out the red carpet to a bunch of bratty heirs, either.
Fortunately, one young heir, who dabbles in reporting and documentary work, was there to break the rules. Because, hey, what’s the worst that could happen if he burns his bridges? He’ll still have lots of money. Hence, Jamie Johnson inserts this into his New York Times dispatch from the front lines:
(Disclosure: Although the event was closed to the media, I was invited by the founders of Nexus, Jonah Wittkamper and Rachel Cohen Gerrol, to report on the conference as a member of the family that started the Johnson & Johnson pharmaceutical company.)
But let’s thank young Mr. Johnson for at least providing comical color scenes of his noble peers, who have all of this (mostly hotel-related) money and who want to save the world with it. Or something like that. Some choice details:
The well-heeled group seemed receptive. “I think it’s fantastic,” said Patrick Gage, a 19-year-old heir to the multibillion-dollar Carlson hotel and hospitality fortune. “I’ve never seen anything like this before.” Mr. Gage, physically boyish with naturally swooping Bieber bangs, wore a conservative pinstripe suit and a white oxford shirt. His family’s Carlson company, which owns Radisson hotels, Country Inns and Suites, T.G.I. Friday’s and other brands, is an industry leader in enforcing measures to combat trafficking and involuntary prostitution.
A freshman at Georgetown University, Mr. Gage was among the presenters at a breakout session, titled “Combating Human Trafficking,” that attracted a notable group of his peers. “The person two seats away from me was a Marriott,“ he said. “And when I told her about trafficking, right away she was like, ‘Uh, yeah, I want to do that.’”
Justin McAuliffe, a 24-year-old heir to the Hilton hotel fortune, was similarly impressed by the crowd. “Hilton, Marriott and Carlson,” he said. “That is cool.”
Very cool, Justin.
Of course, the new generation of Beiberesque hundred-millionaires and billionaires will have other great family responsibilities to safeguard, aside from their reputations as philanthropists. Namely, the family money pile. While the Justin McAuliffes and Patrick Gages of the world dish out grants to eliminate sex trafficking, how will they invest their fortunes to ensure that their respective piles grow forevermore?
These youngins have certain ideals about investing that, it’s implied, the current Old Guard doesn’t share. “It’s not just seen as some old guy writing checks anymore,” twenty-six-year-old Zac Russell, the heir to an asset management firm’s family fortune, says of the new era of Millennial philanthropists. “It’s young people who want to solve real problems.”
Got it. Old people don’t, and never did, want to “solve real problems.” This insight probably comes as a surprise to Russell’s grandfather who, after all, accumulated the family capital and parked it in the tax-exempt foundation on whose board Russell now serves.
Fortunately, there is a buzzterm—an alliterative buzzterm at that—that meets the rich kids’ twin desires of saving the world and growing their fortunes: impact investing. Investing—with an impact. Get it? It “refers to a socially conscious form of investing that seeks to generate both a social benefit and a meaningful financial return,” Johnson writes.
“We want 100 percent of our assets to be value aligned or impact invested,” says Liesel Pritzker Simmons, who—as the piece notes—just finished successfully suing her father for $500 million.
Well, I’m not sure what their financial advisors think of that. There’s a little bit of trying to have your cake and eat it too going on here. If it was so easy to invest in companies that both met all of one’s “socially conscious” goals and produced a fine rate of return, then everyone would have done it already, and the world would have no problems.
If these precocious kids can figure it out, good for them! But most likely, these scions will end up managing their consciences the same way their rich forefathers did: by making money doing whatever the hell makes the most money, and then attempting to offset the colossal damage of that work through philanthropic foundations.