Why The U.S. Doesn’t Have As Many Billionaires As Other Countries
The reason may pleasantly surprise you.
Compared to the rest of the world, the U.S. billionaire list is growing at a slower pace. According to a recent report from UBS and PricewaterhouseCoopers, China gets a new billionaire every five days. More than half the world’s total billionaires come from China, and European countries aren’t far behind. So what about the lowly American billionaire?
According to the same report, the growth of new U.S. billionaires is stagnant at around 1 percent. Though 41 new wealthy individuals achieved billionaire status in 2015, 36 others dropped out of the group, bringing to the total to just around 540. So why isn’t the U.S. gaining billionaires at the same speed as China whose billionaire list grew at a rate of 7 percent during the same time period? (Europe’s rate was 4 percent.)
According to Steven Crosby, senior managing director of global private banking and wealth management at PwC, U.S. self-made billionaires tend to “cash out” or donate much of their wealth to philanthropies. That being said, the combined wealth of American billionaires ($2.56 trillion) handily beats the billionaire wealth total from every other geographic region surveyed.
Sergey Brin, the co-founder of Google has an estimated net worth of $37.5 billion, according to Forbes, but recently donated $1 million to HIAS, the nonprofit that helped his family resettle in the U.S. after fleeing Soviet Russia due to anti-semitism.
And in September, hedge fund manager George Soros pledged $500 million to help refugees and migrants.
Organizations like the Chan Zuckerberg Initiative are leading the charge in donating their massive wealth—indeed, the Facebook founder made international headlines last year when he and his wife announced their pledge to donate 99 percent of their shares.
This mindset is perhaps directly related to the Giving Pledge, an initiative started by Bill Gates and Warren Buffett in 2010. The giving pledge asks the world’s billionaires to donate at least half of their fortunes, and has already recruited 187 billionaires to date.
According to a study published early in 2016 by the Giving USA Foundation and the Indiana University Lilly Family School of Philanthropy, Americans’ charitable donations in 2015 rose 4 percent over the year, totaling $373.25 billion. In short, this means Americans collectively donated more than $1 billion per day, on average.
So, will other nations follow in the philanthropic footsteps of the U.S.? Only time—and stock shares—will tell.