Originally published March 11, 2015
Forbes recently released its annual list of the world’s billionaires. This year, 290 new billionaires were added to the list, which brings the total number to 1,826. With these newcomers, in addition to an overall growth in other billionaire’s assets, the group’s aggregate net worth has increased from $6.4 trillion in 2014 to $7.05 trillion. Topping the list is long-time billionaire Bill Gates (with a net worth of $79.2 billion), who has been the wealthiest individual sixteen of the past twenty-one years.
Along with overall growth, there are three trends that have important implications for philanthropy.
What are the trends?
First, the geographical composition of the billionaires list is continuing to change. The United States continues to house the most billionaires of any country with 541, with New York City being the city with the most billionaires, 78. Moscow remains second with 68 billionaires. Most notably, large Asian cities are moving up the list rapidly. Hong Kong takes third place in the city rankings with 64 billionaires and Beijing with 45 billionaires is expected to overtake London (46) by 2016.
Second, there is a substantial increase of billionaires under 40 years old. In 2014, there were 31 billionaires under the age of 40, and in 2015 we see an increase of 48%, with 46 under-40 billionaires. This is partly due to the increasing number of billionaires with wealth from Silicon Valley and the tech sector. About 1 in 10 of the new billionaires have gained their wealth from the Silicon Valley tech boom, including Evan Spiegel, co-founder of Snapchat, who is the youngest individual on the list at 24.
Third, the number of women on the list increased from 172 in 2014 to 197 in 2015. Despite this increase, women comprise just 11% of the total. Additionally, of the 1,191 self-made billionaires on the list, only 2% (29) are women, with the remaining women having inherited their fortune. It is clear that despite moderate increases, the list is still predominately men.
What does this mean for philanthropy?
These trends reflect some of what we are seeing in the world of philanthropy. First, wealth is international. With the rise of Asian cities, it is clear that wealth is no longer just in North America and Europe. In fact, Asian countries are well outpacing their European counterparts and are continuing to grow.
Secondly, the wealth we see in the Forbes list is volatile—as markets do well, the wealth follows, and in theory, philanthropy increases, too. However, as we learned from the Great Recession, the opposite is true as well. Charitable giving took a serious hit when the world’s richest were feeling the effects of the economic downturn, and we can only anticipate that the cycle may repeat. Additionally, those whose riches are from industries that are not performing well will likely be pulling back on their giving. For instance, we anticipate that the declining oil and gas market may cause the wealthy beneficiaries in the central U.S. to pull back on their charitable giving.
Lastly, it is important to recognize that many of the names on this list are not active members of the philanthropic world, especially those newcomers. We can expect to see these donors cultivated for major gifts in the next few years as they think about moving from success to significance and making an impact through charitable giving.
Copyight © 2015 Bentz Whaley Flessner & Associates, Inc.