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April 18, 2014

New York Times: Including the Young and the Rich

Author:

The New York Times

Including the Young and the Rich: White House Hosts ‘Next Generation’ Young and Rich

 

By Jamie Johnson

April 18, 2014

On a crisp morning in late March, an elite group of 100 young philanthropists and heirs to billionaire family fortunes filed into a cozy auditorium at the White House.

Their name tags read like a catalog of the country’s wealthiest and most influential clans: Rockefeller, Pritzker, Marriott. They were there for a discreet, invitation-only summit hosted by the Obama administration to find common ground between the public sector and the so-called next-generation philanthropists, many of whom stand to inherit billions in private wealth.

“Moon shots!” one administration official said, kicking off the day on an inspirational note to embrace the White House as a partner and catalyst for putting their personal idealism into practice.

The well-heeled group seemed receptive. “I think it’s fantastic,” said Patrick Gage, a 19-year-old heir to the multibillion-dollar Carlson hotel and hospitality fortune. “I’ve never seen anything like this before.” Mr. Gage, physically boyish with naturally swooping Bieber bangs, wore a conservative pinstripe suit and a white oxford shirt. His family’s Carlson company, which owns Radisson hotels, Country Inns and Suites, T.G.I. Friday’s and other brands, is an industry leader in enforcing measures to combat trafficking and involuntary prostitution.

A freshman at Georgetown University, Mr. Gage was among the presenters at a breakout session, titled “Combating Human Trafficking,” that attracted a notable group of his peers. “The person two seats away from me was a Marriott,“ he said. “And when I told her about trafficking, right away she was like, ‘Uh, yeah, I want to do that.’ ”

Justin McAuliffe, a 24-year-old heir to the Hilton hotel fortune, was similarly impressed by the crowd. “Hilton, Marriott and Carlson,” he said. “That is cool.”

The daylong conference was organized by Thomas Kalil, a deputy director for technology and innovation in the White House Office of Science and Technology Policy, with the help of Nexus, a youth organization based in Washington that seeks to “catalyze” the next generation of billionaire philanthropists and other stakeholders.

Mr. Kalil moved nimbly among the affluent participants and through the ornate halls of the Eisenhower Executive Office Building, where the summit was held. “A lot of this is not just, you know, collaborations between the administration and philanthropists,” he said, “but philanthropists finding each other, finding other philanthropists with shared interests.”

(Disclosure: Although the event was closed to the media, I was invited by the founders of Nexus, Jonah Wittkamper and Rachel Cohen Gerrol, to report on the conference as a member of the family that started the Johnson & Johnson pharmaceutical company.)

Policy experts and donors recognize that there’s no better time than now to empower young philanthropists. Professionals in the field, citing anAccenture report from 2012, estimate that more than $30 trillion in wealth will pass from baby boomers to younger generations by around 2050. At the same time, the Dorothy A. Johnson Center for Philanthropy (no relation to this reporter) and the nonprofit consulting group 21/64 have concluded in arecent study on philanthropic giving that heirs are becoming involved in family foundations at an earlier age — specifically in their 20s and 30s — and imprinting them with the social values of their generation.

A case in point is Zac Russell, an eloquent 26-year-old whose grandfather made a fortune with the asset management firm Russell Investments and who officially joined the board of the Russell Family Foundation last year. While not an ardent supporter of the Obama administration, he decided to attend the conference to consult, he said, with White House experts onclimate change and to discuss grass-roots efforts to improve water quality in Puget Sound, where the foundation is based.

“It’s not just seen as some old guy writing checks anymore,” Mr. Russell said. “It’s young people who want to solve real problems.”

Sporting scraggy Brooklyn-style facial hair and a loosely fitting suit without a necktie that contrasted with the stately White House surroundings, Mr. Russell spoke with an air of cynicism. “Their head of public affairs contacted me and said, ‘Let’s talk,’ and so we’ll talk,” he said.

The conference, which lasted all day and included breaks for lunch and hallway hobnobbing, covered a broad range of topics including “Climate Change,” “Millennial Healthcare” and “Revitalizing Cities.”

One topic that seemed to generate intense interest among the wealthy heirs was impact investing, which refers to a socially conscious form of investing that seeks to generate both a social benefit and a meaningful financial return.

A morning breakout session on the subject was led by Jonathan Greenblatt, a former entrepreneur from the impact-investing world who now holds the lengthy title of special assistant to the president and director of the Office of Social Innovation and Civic Participation in the Domestic Policy Council. Held in a grand two-story room with mosaic floors and classical marble-fitted walls, it resembled an Ivy League honors seminar, with young investors packed around a table as Mr. Greenblatt instructed them to go out into the world not only to make money, but to do good.

It was rhetoric that Liesel Pritzker Simmons, 30, could appreciate. A strong believer in impact investing, Ms. Simmons received a fortune that Forbes magazine estimates at about $500 million, through a lawsuit against her father, Robert Pritzker, and other members of the family after she was left out of the Pritzker inheritance. In 2011, she married Ian Simmons, whose forebears were founders of the Montgomery Ward department store chain, and together they have become a recognizable power couple in philanthropic circles.

“We want 100 percent of our assets to be value aligned or impact invested,” Ms. Simmons said. She and her husband recently formed the Blue Haven Initiative, a public-spirited investment office and philanthropic organization. The gravitas she commands as a boldface name, even among this silk-stocking crowd, meant that people wanted her attention as she made her rounds at the conference.

“I was a little worried they were going to get a bunch of rich kids in the room and fund-raise for the Democratic Party,” Ms. Simmons said. “But they didn’t.”

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