The annual UBS Billionaire Ambitions Report was released in December, and this year there was a striking top-line finding: For the first time, the number of new billionaires who inherited wealth exceeded that of “self-made” billionaires. This has led to a lot of conversations around a great wealth transfer that will have economic and social implications.
But there’s one area where potentially dire results aren’t being talked about enough: philanthropy.
Why is this an issue? Self-made billionaires are more likely to become philanthropists who give away a large part of their wealth than are those who inherit. Much of the world’s current philanthropic architecture is built on the foundations of founders of companies, but the diminishing of first-generation billionaires may have a chilling effect on global giving.
That said, the younger generation still has a stated interest in social and environmental issues and doing good — they are often keener on impact investing and sustainability than their parents, for instance. And they may be averse to giving because they aren’t sure how to have a substantial impact on concrete problems facing the world.
How do we thread the needle between these impulses? The answer may be an approach to philanthropy that’s more directly tied to the activities of family offices, where philanthropic efforts are intertwined with the concept of social investment rather than being classified as charitable initiatives of the type successors often eschew.
I’ve found that many of the best examples of a family-office-led social investment approach are among wealthy families in middle-income countries — where there is often a greater sense of obligation to the local community, borne of generations of being rooted there as a business; and a sense that helping one’s nation develop its full potential is good for business in the long run.
Two such examples are found among prominent families in Turkey: the Sabancı and Ӧzyeğin families.
The Sabanci family, owners of the Esas Group investment firm, in 2000 created the social investment arm of their family firm, Esas Sosyal, tasked with focusing on alleviating Turkey’s high youth unemployment with school-to-work transition programs.
Emine Sabancı Kamıs¸ lı, who was the driving force behind Esas Soysal’s creation as she entered a family business leadership role in its third generation, sought to apply the same rigor in terms of research, objectives and metrics that had served the Sabancis well in for-profit investment to bettering society. In this way, Emine made philanthropy an arm of business, with all the accountability and attention to detail that implies, rather than simply cutting a check to charity or outsourcing it.
This approach can appeal to successors who want to do good but move beyond the old philanthropic model; it’s about finding an issue or goal that matters and can be measured.
Similarly, Turkish financial entrepreneur Hüsnü Özyeğin set up his eponymous philanthropic foundation in 1990 with the goal of advancing female education, especially in rural Turkey. The foundation worked with the Ministry of Education to build more schools, reaching far into the hinterlands to give girls an opportunity to learn and ultimately enter the workforce. Again, worthy social goals were tied to the long-term good of business.
Özyeğin later expanded his foundation’s role to disaster relief — a major humanitarian and economic challenge in Turkey — and played a key role in relief for the 2023 earthquake that devastated parts of central and southern Turkey. Through all this, the foundation has operated in a financially sustainable way, being allocated dividends from the family’s for-profit investment arm and having to meet expectations around quantifiable metrics.
In the case of both the Sabanci and Özyeğin families, philanthropy has depended on making giving an arm of the family office, subject to the same discipline as any investment enterprise. As the next generation comes into its own in the West and more traditional charitable giving becomes less in favor, examples from Turkey and elsewhere could be key for showcasing an approach that unites investment and philanthropy under the umbrella of the family office — and creates a paradigm for marrying social impact with long-term interest.