The Times on Avonbrook
Why wealthy children are giving their inheritance to charity by Alexander Blair (The Times, October 28th, 2008)
As the great-grandson of a pawnbroker, who made his fortune buying up shops in London suburbs, Michael Amherst could have chosen to blow his inheritance on drink, drugs or a small yacht. But at 25, he chose instead to invest £300,000 in founding Avonbrook Projects Abroad, a charity that promotes sustainable educational ventures in Africa and the developing world.
His peers are cast as the “Me Generation”, for whom little exists beyond The X Factor and updating their Facebook entries. Yet now, as Live Earth concerts make climate change and social responsibility cool among 16 to 25-year-olds, a new generation is developing a social conscience and new sense of philanthropy.
A recent survey by the Future Foundation found that a fifth of teenagers questioned saw themselves as “hardcore greens”, demonstrating that climate change and eco living are no longer fringe issues and last week 45 per cent of 16 to 25 year-olds questioned by the youth volunteering outfit, vinspired.com, said that they believed the world is too materialistic.
To the mega-rich, a few hundred thousand quid might not sound a vast amount of money. But most would agree that giving your entire inheritance away is a selfless act. Amherst came into his money, after the sale of The Abbey school, Tewkesbury, which had been founded in 1973 by his father Miles Amherst, a former teacher. It was his life's work and at no time easy.
“It was his dream,” Amherst says. “At the beginning he camped out as there was no heating and he had to chop up old desks to keep warm. He had to sell the family home twice to bail out the school.” But within 20 years of Miles's retirement, the small private school had to close. The site was sold and the money divided between the family. Amherst, an aspiring author, decided to continue his father's legacy with his share of the sale.
“I liked the idea that the sale of his school could spawn a new generation of schools around the world.”
Avonbrook Projects Abroad intends to donate £20,000 a year over the next decade. The first project is to expand the premises of Akany Avoko, a home in Madagascar for 120 abandoned, orphaned or troubled children and to pay the salaries of two teachers.
While Amherst is a pioneer for young wealthy philanthropists in Britain, in the US, his example is more common. Karen Pittelman, 33, from New York, inherited $3.5 million from her developer grandfather in her early twenties. Uncomfortable with her wealth, she gave it all away to found the Chahara Foundation for poor women in Boston. Pittelman has since written Classified: How to Stop Hiding Your Privilege and Use it for Social Change and is one of nearly 1,000 18 to 35-year-old Americans who work with the Resource Generation, a charitable organisation that supports wealthy young people who wish to use their fortunes to help a wider society.
“The key thing is that it's not a wealthy individual deciding what's best for others, but shifting power and sharing it with the community,” says Taij Moteelall, executive director of Resource Generation. With the top 1 per cent of the US population controlling 33 per cent of the wealth, Moteelall says that there is a need to help the new generation deal with the confusion of inheriting vast sums. In 2003, 10,000 US households were reportedly worth $100 million.
Poor little rich kids rarely draw more than a snort of derision from the less well-off. But the dissolute life that vast wealth can lead to is no more starkly drawn than in the example of John Hervey, 7th Marquess of Bristol, who died at 44 in 1999, having squandered £35 million on parties, drugs and male escorts.
Now, increasing numbers of Britain's new “venture philanthropists” choose to sink the bulk of their wealth into charitable foundations instead of leaving it to their children. Perhaps taking his cue from the American investor Warren Buffett - who is worth $62 billion and declared that he would leave his children “enough so that they feel that they could do anything, but not so much that they could do nothing” - Lord Ashcroft, worth £1.1 billion, said this month that 80 per cent of his wealth would be left to a charitable foundation. Recently Lord Sainsbury and Sir Tom Hunter also pledged to give away £1 billion.
Nicola Horlick, mother of five and head of Bramdean Asset Management, has amassed £25 million and gives away about a quarter of her annual income to Great Ormond Street and her Dress for Success charity, among others. “I think the kids should have a nice place to live and some money, but too much is bad for them. I've known children from incredibly wealthy families who've achieved nothing because there was no incentive,” she says. “I think it's important to encourage them in philanthropy so that they understand there's more to life than Facebook.” While Horlick was vice-president of Unicef, she took her children to Zambia to visit the House of Moses orphanage in Lusaka. As a result, her eldest daughter was inspired to return to help to construct a school once she had completed her GCSEs. Horlick's children already raise money for leukaemia, after the death in 1998 of their sister Georgina from the disease.
Peter Jones, the Dragons' Den entrepreneur and father of five, has gone a step farther to instil a sense of philanthropy in his children. He has said that each will have to work but has promised that a trust fund will double their income each year and that if they work in the charity sector or take up a socially responsible vocation, the trust will pay three times that salary.
Susan Mackenzie, director of Philanthropy UK, says that the traditional expectations of the British trust fund child have shifted. “We are in the midst of a culture change. Ten years ago, three quarters of The Sunday Times rich list was inherited wealth. Today that ratio is completely reversed,” she says. “Inheritors see it as family money, but these people feel much freer to spend it as they wish, and they often want to give back to society and enjoy the benefits of that.”
With recession, the collapse of banking systems and a global tightening of belts, philanthropy might be expected to be among the first victims. But it is unlikely to be hard hit, says Mark Evans, head of Coutts Bank's family business and philanthropy department, which was set up in 2005. “These [new philanthropists] are ‘engaged givers', passionate about their causes. They wouldn't stop supporting a person dying of cancer because the stock market's taken a tumble,” he says. “And more and more don't want to hand it all to their children, because they don't want to take away their children's ambition or sense of purpose.”
The donors he advises range from their early twenties to mid-forties and most are entrepreneurs who have cashed out of their first business. Although he agrees that Britain can learn from the US, he believes that philanthropy here has its own momentum. “We need to talk about philanthropy more,” he says. “Like sex, and politics we tend not to talk about it at dinner, which they do in the US.”
Last year, Sir Ian Wood, one of Scotland's richest men, set up the Wood Family Trust to give away £50 million to improve the wellbeing of people in poorer nations. Sir Ian brought his sons up to believe that they must make their own way through life and tied up all their money in trust. “We're privileged to live on this planet and we must expect to give something back,” he says. “It's not true to say I don't think you should pass on wealth to the next generation, but I do think you need to do it carefully and that you should give it back to your fellow humanity as well.”
www.avonbrook.org.uk
