My father passed along a news clip about a study called the Bank of America Study of High Net-Worth Philanthropy that compares the giving patterns of entrepreneurs versus those who inherited their wealth. High net-worth is defined in this study as someone having at least $200,000 in income or $1,000,000 in net assets. The conclusion: high net-worth entrepreneurs give on average $232,206 compared with heirs and heiresses who give an average of $109,745. For those of you not ready for mental math this morning, that is over twice as much! The study is long on facts and statistics, and short on any analysis, so I’ll take a stab at it.
Most entrepreneurs I know who have had financial success still pinch themselves once in a while to make sure their successes really happened to them. They often use words like “blessed”, “lucky”, and “fortunate” to describe their success. The days of sweating payroll are still fresh in their minds. They remember how many times they came within days of failure. They remember all of those sleepless nights.
Most entrepreneurs I know understand that they did not make their business a success in a vacuum. It took the hard work of employees who also took a risk by joining their fledgling business. It took investors who took a risk in their idea. It took bankers who believed in their cash flow and their character. And many see God’s hand at work in their fortune, understanding that they are but stewards of what they have been given.
Most entrepreneurs I know viewed success, from the very beginning of their business, to mean much more than profit, a paycheck and “the big payday.” Many talk about the ability to give back if they able to be successful. I do an exercise with aspiring entrepreneurs in which I ask them what they would do if they won the lottery tomorrow. For many, philanthropy is at the top of their list.
I will not even try to judge what is in the hearts of those who inherit their wealth. I will say for many of them, it is a fixed and limited sum. What they get from their inheritance is all they have. Entrepreneurs, on the other hand, build their wealth from a process that they can repeat over and over again.
In this age when out economy is being transformed by entrepreneurs, what a wonderful opportunity to look more and more to them to take on the burdens of our society. What a wonderful opportunity to rethink our broken system of governmental redistribution of wealth that is doomed to entropy, rather than the boundless potential of entrepreneurial wealth created and freely shared.
Dr Jeff Cornwall
Co-founder of The Entrepreneurial Mind, serial entrepreneur and professor of entrepreneurship.
You are so right. I often look at my business as a way to make it better or bigger not because I need money, but for accomplishing something hard.
Thank you Dr. Cornwall for your post on this article. Because you have made this information visible and translated what it means, you’ve connected this entrepreneur with, perhaps, THE opportunity I’ve been seeking, for funding a new media company based on spirit-enriched values. Thank you from me, a past student, and thank you from Wildheart Media Group, LLC. We’ll be seeing you soon =)
I don’t necessarily have the same experience with most entrepreneurs I know stating upfront that if they’re successful, they want to give back. While it might be true that some of them are thinking about it, it’s a great thing to keep in mind especially when you are starting a business.