The rise of Billionaires since Covid-19

July 2022

 

The wealth of billionaires rose more in the first 24 months of Covid-19 than in the last 23 years combined. This has continued post pandemic. Oxfam's research into global wealth disparity published to coincide with the World Economic Forum identified that the total wealth of the worlds billionaires is now equivalent to 13.9% of global GDP.

Collectively billionaires donate less than 1% of their wealth to the charitable sector. Schmitz and McCollim’s 2021 report Billionaires in Global Philanthropy: a Decade of the Giving Pledge, reports that there has been a rise in the number of billionaires participating in major giving since the start of the Covid-19 pandemic. In January 2022, Forbes estimated that more billionaires were giving to charity, with the US’s 25 biggest givers donating a total of $169b over the course of their lifetimes. Will we see this continue into 2023, and hopefully see more billionaires becoming major donors?

 

Sunday Times Rich List

The 2022 Sunday Times Rich List recorded a total of 177 billionaires, six more than in 2021. These billionaires are a mix of real estate entrepreneurs, financial investors, and those who have inherited wealth. In the UK, combined fortunes grew by 8%, to a total record £710b in just 12 months. The Irish Times recently reported that wealth of Irish billionaires rose by €16b during the pandemic. This 55% increase brings the asset pile of Ireland's richest individuals to €51b.

 

Forbes World's Billionaires

The 2022 Forbes World's Billionaires list recorded 236 newcomers in April 2022. Newcomers included global pop star Rhianna and software company founder Tope Awotona. There are now 2,668 billionaires on Forbes' 36th-annual ranking of the richest people across the globe.

China produced 62 new billionaires (two from Hong Kong), the most of any country. The billionaires from China included Chris Xu, founder of popular fast fashion company Shein. Xu is worth an estimated $5.4b. Engineering professor Tang Xiao'ou was also featured on the list and is estimated to be worth $5.7b. The richest self-made newcomer from nearby Taiwan is Zhang Congyuan, who is estimated to be worth $11.7b. Congyuan is the founder of shoe manufacturer Huali Industrial which makes footwear for many brands, including Nike and Puma.

America continues to lead the world, with 735 billionaires worth a collective $4.7 trillion, with the top 2 richest people on the list being the CEO of Tesla, Elon Musk, with a net worth of $219 billion, and the chairman of Amazon Jeff Bezos, with a net worth of $171b. The third wealthiest on the list is French businessman Bernard Arnault & family, with a net worth of $158b. However, despite more billionaires joining the list this year, 329 people fell of the list, which is the highest number recorded since the 2009 financial crisis.

 

Billionaires who doubled their wealth during Covid

The Guardian list Musk, Bezos and Arnault as 3 of the 10 billionaires who were able to double their wealth during the first two years of the pandemic. The world's 10 richest men more than doubled their fortunes from $700b to $1.5 trillion, at a rate of $15,000 per second, equivalent to $1.3b each day.

Many of the billionaires who are still profiting since the pandemic have made wealth in the food and energy sectors. Their wealth continues to increase their fortunes by $1b every two days, with billionaires in the pharma and tech sectors also increasing wealth. In contrast, Oxfam's recent policy paper, 'Profiting from Pain' shows that 263 million people are at risk of falling into extreme poverty this year, due to the continuing effects of the pandemic and the rapidly rising costs of essentials, including food and energy.

Several of the people on this list have signed the Giving Pledge, a commitment to dedicate most of their wealth to charitable causes. Will we see more of the world’s richest people committing to donating the majority of their wealth in the future?

 

Billionaire’s Giving

Steve Ballmer is one of the 10 billionaires listed by The Guardian that doubled his wealth during the pandemic and is giving back. Alongside his wife Connie Ballmer, the couple pledged $425 million in March 2022 to University of Oregon and created the Ballmer Institute for children's behavioural health to help improve the lives of children. In 2021 the Ballmer's also awarded a set of grants totalling $38 million to groups addressing Washington State's shortage of mental-health workers, at an attempt to improve their health-care system.

Other billionaires who have also made major donations this year include Sir Chris Hohn and Sam Bankman-Fried. According to the Guardian, billionaire hedge fund manager Sir Chris Hohn, gained $9.5b in 2021, for his Children's Investment Fund (TCI). Hohn is ranked as one of the top 2 donors on the 2022 Sunday Time Giving List, with environment causes being listed as his main beneficiaries. Hohn's recent donations reach £347.4 million, while his wealth for 2022 totalled £2,600 million.

American entrepreneur and billionaire Sam Bankman-Fried signed the Giving Pledge in May 2022. Bankman-Fried promises to give away the majority of his wealth to philanthropic causes. He is one of the wealthiest individuals to arise from the crypto market boom, with his wealth valued at $21b by Forbes. Bankman-Fried is also the founder of The FTX Foundation, a non-profit organisation with the mandate to donate to cost-effective charities 1% of all fees collected funded by FTX. To date, the FTX Foundation, FTX's philanthropic arm, has earmarked $21.8 million to charity.

 

Will Billionaires continue to give?

In September 2021 American global creative platform Refinery29 reported an increase charitable donations as £18b was donated to charitable causes in 2020, up from £11.5bin 2019.

In June 2022 American business executive and billionaire Sheryl Sandbery (with a net worth of $1.5b) became the latest female billionaire to turn her focus to philanthropy. Sandbery plans to refocus on women issues and expand her charitable foundation. She is looking to fill 13 new positions to support growing community and partnership organisations.

Only time will tell if this rise of billionaires giving to charitable causes will continue in the future, and how it may impact major charitable giving.

 

Get in touch

Would you like help finding your next major donors? Our experienced research team can undertake research to find you new prospects or provide you with in-depth information on your current prospects. Our New Names Service provides you with names of wealthy people, not currently connected with your organisation, but research suggests, have both the capacity to give and an affinity to your cause. If you would like to know more then please email us at info@prospectingforgold.co.uk or give us a call on 01491 577311.