Most people with wealth have every intention of being generous. And most of them never get around to it. Not because they don't care, but because nobody ever helped them figure out why they're giving in the first place.
I sat down with Alex Johnston for episode 100 of the Decidedly Podcast. Alex is the president and founder of Building Impact Partners, a philanthropy advising practice that has helped clients give away over one billion dollars since 2012. He is also a member of Entrepreneurs' Organization, which my dad and I are both members of, and the author of a book called Money with Meaning.
What we learned in that conversation surprised us. The challenges that ultra high net worth families face in creating impact with their money are the same challenges that people across the entire wealth spectrum face. The dollar amounts change. The psychology does not.
The checkbook problem. Alex describes what most of us do as "checkbook philanthropy." We get a piece of direct mail, we see something on TV, someone invites us to a gala, and we write a check. It is reactive. It is responsive. And for most people, it is just another household expense they do not think much about.
But when people reach a level of wealth where those checks start getting bigger, that approach stops being satisfying. They want to know their money is actually making a difference. And that is where they get stuck, because in order to know that, you have to get more involved. Before long, giving starts to feel like a chore. So people with a lot of capacity end up doing less giving, not more.
The mindset nobody talks about. Here is something Alex shared that really stuck with me. About 75 percent of ultra high net worth individuals are self-made. They started from working or middle class backgrounds. And they bring the money habits from those backgrounds right along with them into wealth.
Think about the values most of us grew up with. You do not talk about money. You are careful with money. You do not spend the principal. Alex's mother was a school teacher who retired at 62 and spent the next eleven years worried about outliving her savings. That psychological orientation does not just disappear when someone builds a business and sells it for a hundred million dollars.
I see this all the time. I have helped clients sell their business, receive a large lump sum of capital, and even when it is clearly more than they will ever need, they are resistant to shifting their relationship with that money. They are measuring their security, their worth, their identity by the number in the account. And that mindset, the one that served them so well while they were building, becomes the very thing holding them back from impact.
Three orientations toward wealth. Alex frames it as three stages. There is the "aspire and acquire" stage, when you are growing your wealth. There is "manage and maintain," where maybe you have sold the business and you are trying to hold on to what you have. And then there is "distribute and dispense," where you have done the math and...
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Three orientations toward wealth. Alex frames it as three stages. There is the "aspire and acquire" stage, when you are growing your wealth. There is "manage and maintain," where maybe you have sold the business and you are trying to hold on to what you have. And then there is "distribute and dispense," where you have said, "I have enough. I am giving a significant portion of this away."
Most entrepreneurs are anchored in that first stage. Always growing. That is the mindset. And their giving never keeps pace with their wealth because they have not made the psychological shift to the next orientation. They have not had the conversation with themselves about what their money is actually for.
Meaningful giving lives in the sweet spot. Alex uses a simple framework. Picture two axes. One is social impact. The other is personal fulfillment for the donor. Meaningful giving is where those two meet. But there are three other possibilities that people get trapped in.
There is selfish giving, where you are not producing impact but you are personally excited about it. Think of the fifty million dollar gift to a private school that names the gym after your family while your kids attend. Then there is spiritless giving, where you are driving so hard for metrics and milestones that you have lost touch with your own values and relationships. And then there is senseless giving, which produces neither impact nor fulfillment. You invited me to your dinner party, so now I am showing up at your charity gala. We are just trading checks back and forth.
There is an incredible amount of giving that falls into that last category. And it is one of the biggest reasons people leave their money on the sidelines. They see philanthropy that feels transactional, competitive, or just plain off-putting, and they want nothing to do with it.
The real risk is not giving at all. This was the thing Alex said that I keep coming back to. The biggest risk for wealthy donors is not that they give their money to something that does not work. It is that they do not give their money away. They end up sitting on a pool of capital that, when you really do the math, they do not need.
He shared the example of Chuck Feeney, the founder of duty-free shops. Feeney gave away eight billion dollars during his lifetime. He and his wife reportedly kept only two million for themselves. That is an extreme example. But the principle underneath it is universal. What is more senseless, in a world where so many compelling needs exist, than holding on to resources you will never use?
It starts with two questions. In chapter one of his book, Alex boils it down to this. First, how much impact do you feel like you are having with your giving so far? Second, what is your level of satisfaction and fulfillment through your giving? Those two questions open the door to everything else.
I tell my clients something similar. We look at wealth as stewardship. It is our role to transfer that wealth to its greatest and highest purpose. Giving is key. But the reason people hesitate is the uncertainty. They do not know how they want their impact to show up. There are too many choices. They are not sure the money will go to its highest purpose. So they freeze.
The only guaranteed bad outcome. When I asked Alex for his single biggest decision-making tip for business owners considering philanthropy, his answer was simple. Make decisions. People carry around intentions that have never been actualized through the process of actually deciding. Leadership, contribution to others, all of it happens because you make decisions. The worst thing is not making one.
I got so excited when he said that, because it is something I tell my clients all the time. The only way to guarantee bad outcomes is to not decide anything at all.
My takeaway from this conversation is that these issues scale up and down. Whether you are talking about giving a dollar or giving ten million dollars, the core questions are the same. What is my purpose? What is meaningful to me? How can I be a good steward of this wealth? Start with the why, and the tactical decisions become a lot easier.
If you are sitting on wealth and you know you want to do something meaningful with it but you have not figured out how, that is not a failure. It is a starting point. Let's have that conversation.
This article is based on a conversation from Episode 100 of the Decidedly Podcast with guest Alex Johnston of Building Impact Partners. Insights, advice, and comments provided by Sanger Smith, Sean Smith, and guests of the Decidedly Podcast should not be considered personalized financial advice or recommendations. This content is produced solely for informational and educational purposes. For personalized guidance, book a free conversation.
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