Virus induced economic crisis:
the rich bounce back, some “give back” 

TORONTO – Coronavirus has claimed the lives of over two million people. Millions more face poverty; meanwhile some of the world’s wealthiest people and corporations continue to thrive and to grow.

Thousands of the world’s wealthiest people recouped their pandemic induced losses within nine months. For the others, it could take decades to bounce back as billions struggle to make ends meet.

For example, some of the world’s 2,095 billionaires experienced a growth in wealth between the months of March to December 2020. Most notably, in the areas of technology and healthcare.

One case in point, Amazon founder, Jeff Bezos’ fortune surged by 65% during that period. That refl ects a growth in wealth worth $73.7 billion (USD), according to data from the Forbes’ annual billionaires list.

Over that same period, Elon Musk, founder of Tesla and SpaceX experienced the highest increase, 524%. That represents a $129 billion boost in net worth. Evidently, the finances of some fared much better than others.

Even in Canada, in the wake of Covid-19, millions of people lost their jobs and face financial insecurity. Yet, in the first six months of the pandemic, twenty of the nation’s top billionaires amassed a combined growth in wealth of $28 billion ($37 CAD). One accumulates fortune in a variety of ways. Typically, wealth is “self-made”, inherited or a combination of both. As with some of their less-wealthy counterparts, billionaires share a particular interest in philanthropy.

According to a recent 2020 report by Wealth-X, a wealth research and information agency, over half of all billionaires in 2020 (51%), list philanthropy as their primary interest. Some examples include charitable acts and other good deeds to help the disenfranchised and society as a whole.

In the first five months of the year, more than 10% of billionaires donated towards Covid-19 related causes. Beyond that, others gave anonymously and in the form of non-monetary donations such as PPEs and other supplies.

Another interesting observation is the demographic of billionaire philanthropists and their propensity to contribute to various causes based on the origin of their wealth.

Fortune may come from a great idea, a wise invention, smart investing or inheritance. It’s what one does with it that can make a difference. Over the last five years, 68% of females (of which make up one tenth of global billionaires) who inherited their wealth contributed more than one million dollars each to various charitable causes. These include causes which address issues of poverty, equality, education, the environment and healthcare (graph 1).

Of the male philanthropists who inherit their fortune, only five percent contribute sums greater than one million. When wealth is “selfmade”, the rates of contributions are almost reversed. It is the men (67%) who are more generous in their donations. By contrast, only 12% of female philanthropists are as generous when their wealth is “selfmade”.

Last year, Bezos made the single- largest charitable donation, $10 billion (USD) to the Earth Fund. It is an initiative to help fi ght climate change. Significant but hardly remarkable, given the growth in his amassed fortune.

Still, we should be thankful.

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