First, it deals with the question of what to do with wealth, keep it, tax it, or give it away. Society must choose.
Second, it complements government in creating opportunity for future generations. It plays a role in social transformation when the hands of government are tied.
Third, and perhaps most important, it resets the “moral compass” as wealth creation shifts to new generations. According to Lord Acton, ‘wealth and power corrupt and absolute power corrupts absolutely.’ If we shut off opportunities for wealthy individuals to share their wealth, we will also shut off the creation of wealth, which has far greater consequences for an entrepreneurial society.
Excerpt from the forthcoming book by Professor Zoltan Acs: The Philanthropist Hero: Completing the Circle of Prosperity, Princeton University Press