Last week we met Tony, 45, a second-generation leader of his family manufacturing business. Tony and his siblings worked to grow what their parents started, and he is grateful that today they are doing well, enough for him to think about donating to health causes.
However, Tony’s wife is against the idea. She believes the money should go straight to their children, whom Tony says she has been indulging. She made Tony feel guilty about giving money to strangers rather than lavishing it on his kids.
Tony’s wife is not working in the business. The siblings wisely decided early on to not allow in-laws who may create trouble.
Objectively, she should not be stopping Tony from doing what he wants with his earnings, but since she is the mother of his children, Tony would have to talk to her and explain that spoiling kids stems not from love but rather from fear.
But back to the main issue: to give or not to give away extra wealth?
Warren Buffett and Bill Gates have famously decided to hand over bulk of their fortunes to charities, rather than to their children. They are not the only ones.
Andrew Forrest, Australia’s richest man in 2008, and his wife, Nicola, have already channeled 1.5 billion Australian dollars ($1.05 billion) to their Minderoo Foundation, which focuses on education and indigenous Australians.
The chair of Fortescue Metals Group made his fortune in mining and cattle ranches. His net worth in 2017, according to the Financial Review Rich List, was 6.84 billion Australian dollars, making him the sixth richest in the country.
In 2013, the couple became the first in Australia to pledge to give away their wealth. They continue to urge wealthy people everywhere to use their resources for the greater good.
“Our kids feel zero entitlement to their parents’ wealth,” Forrest tells Forbes Asia in July 2019.
“We’ve encouraged that from a very early age. At a certain point, we got together as a family and said, ‘Look, wealth can really make people miserable. You know that it actually is no guarantee of success in life. But the accumulation of your own wealth, of your own achievements, that’s different. Maybe it will not be marked in money, it could be just marked by the things that you’ve done for others, or the things you’ve done in your own career; it might not reflect itself in capital—generally it doesn’t. But when you achieve something yourself, you feel that inner satisfaction.”
“We asked our children, ‘How would you feel if we give away the wealth we’ve made to causes that really, desperately need it? You kids aren’t going to starve. You’ll still inherit personal effects and things. But this huge rump of wealth, let’s put it to hard work. Do you kids agree that’s a good idea or not? Let’s have it out.’ And they all agreed.”
“Wow! That’s unbelievable,” Tony tells me. “I wish my kids can think that way.”
“Forrest and his wife raised their kids to think that way,” I say. “It’s not too late for your children, or your wife, for that matter. Talk to them, honestly and openly. Talk to them now.”
“Maybe it’s because he’s Australian,” Tony says. ‘It seems to me that those who can freely give their money away are Americans or Australians. I don’t see Asians doing this. They give something, but not too much, and mostly as tax incentives.”
“If you get a tax break while doing good, I don’t see anything wrong,” I say.
I show him Forrest’s thoughts on the matter:
“Across Asia, including Australia, there’s a defensive mind-set [among the wealthy]. It’s a mind-set that you made it all, so you could lose it all, so you should really hang on to it. Actually, we live in a civilized world where laws are enforceable and reliable, and it’s not going to get taken off you. But the way you should share it is by giving it away—and not randomly. The skill you have, which allowed you to accumulate that capital, you should use that skill to distribute capital in the wisest, highest-leverage, highest-benefit way possible.”
Queena N. Lee-Chua is with the board of directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” at www.lazada.com.ph or call National’s Jennie Garcia at 0915-421-2276. Contact the author at blessbook.chua@gmail.com.