Philanthropy gains importance in tackling problems

Peter Vogel
Will we be replaced by robots? Will we need to have a guaranteed minimum income and in turn a robot taxation? Further, the world is facing major challenges on a societal level.
Peter Vogel

LEADERS around the world are confronted with major challenges, many of which seem too big to be resolved by one single stakeholder alone. The fourth industrial revolution is disrupting the way we live and work, forcing us to rethink our strategies and core beliefs.

Will we be replaced by robots? Will we need to have a guaranteed minimum income and in turn a robot taxation? Further, the world is facing major challenges on a societal and environmental level, as summarized in the UN Sustainable Development Goals 2030.

Never before have political and business leaders been so uncertain about the answers to these questions and challenges. However, these issues require immediate attention from public policy, businesses and broader society. The social contract between the different stakeholders is changing and is forcing leaders to rethink their position on these matters and their role in the economy and society. Yet, it is everything but trivial to resolve these challenges because there is no one-size-fits-all solution; Instead the interplay between stakeholders is required — including public policy, businesses, NGOs, affluent families and philanthropists, and the broader public.

In this mix of stakeholders, enterprising families have long played a central role in tackling societal and environmental challenges. While charitable giving has been around for a long time, philanthropy in the form we know it today is a comparatively new phenomenon. Two of the founding fathers of modern philanthropy, John D. Rockefeller and Andrew Carnegie, had large ambitions to improve the US public health and education systems. But also others, like Julius Rosenwald, Olivia Sage or Robert Brookings left their marks on society ... and the list could go on.

Despite a long tradition of family philanthropy, we can observe a growing desire to leverage their wealth to engage in philanthropy and take on more responsibility in tackling some of the great challenges of our times. Justin Rockefeller, Liesel Pritzker Simmons or Katherine Lorenz are just three examples of next generation philanthropists who are out to change our world in profound ways.

There is also a new crop of self-made wealth holders who have decided to use their wealth to do good in the world.

We are at a unique moment in time when it comes to tackling today’s societal and environmental challenges. While it is true that there is a growing gap between rich and poor and that a smaller and smaller number of individuals control the vast majority of wealth, there is a growing breed of self-made wealth owners and inheritors who are cognizant of their disproportionate amount of wealth and who have committed to contribute a majority of their wealth to philanthropy.

That suggests that something big could come out of these confluences of forces — and even make the world a better place.

The author is IMD Professor of Family Business and Entrepreneurship. Shanghai Daily condensed the article.

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