Tag: donations

A woman who comes from a European business dynasty is taking part of her inheritance and allowing 50 strangers to determine what she does with more than $27 million. Why? It’s her way of fighting wealth inequality.

Marlene Engelhorn, 31, believes the Austrian government should impose taxes on wealth and inheritance – but since they aren’t, she is taking it into her own hands, she says.

She has sent invitations to 10,000 randomly selected people in Austria, asking them to complete a survey. Out of those who complete it, she will narrow the pile down to 50 people of different backgrounds that she feels represent the Austrian population. 

They will become Guter Rat – which translates to Good Council – and will help her develop ideas for how to distribute $25 million euros – more than $27 million U.S. dollars.

In her mission statement, Engelhorn says her wealth was accumulated before she was even born. “It was accumulated because other people did the work, but my family was able to inherit the ownership of an enterprise and thus all claims to the fruits of its labour,” she writes on the project’s website. 

Engelhorn inherited miilions from her grandmother, who died in 2022, according to BBC News. They are descendants of Friedrich Engelhorn, who founded BASF, a German pharmaceutical company. It is unclear how much Engelhorn, who lives in Austria, inherited from her grandmother, who Forbes estimates was worth about $4.2 billion. She declared before her grandmother died that she would be giving away about 90% of her inheritance.

Engelhorn believes many heirs give almost none of their wealth back to society and benefit from tax privileges. 

“Inheriting is an imposition on society. Inheriting means being born directly into the boss’s armchair – but not even needing it. Inheriting means that doors open – doors which others never ever get to see in their lifetime. Inheriting means feeling financial security that protects you from unbearable work, unbearable or inadequate housing, health disadvantages and much more,” she writes.

Poverty is also up in Austria, she says. According to EUROSTAT, which provides statistical information on EU countries, the risk of poverty rate in Austria was 14.80% – nearing the country’s record high of 15.20% in December of 2008.

Engelhorn doesn’t want the family we are born into to determine if we have a good life. Instead of just donating the money herself, which she says “grants me power that I shouldn’t have,” she wants others to help her redistribute the money.

So, the council of 50 will meet over six weekends between March and June to have moderated discussions about how to use her wealth to create change. She will pay for their travel and stay during the conferences and will also compensate them.

The wealthiest 1% of the population in Austria holds 50% of the nation’s net wealth, according to the Guter Rat website. Most of that 1% inherited their wealth, like Engelhorn.

Austria has no estate, inheritance, or wealth taxes and yet more than 2/3 of Austrians are in favor of taxes on wealth, according to Guter Rat.

While the U.S. does have these taxes in place, very few people pay estate taxes – the tax paid when wealth is inherited. In fact, in 2016, only about 5,500 people who died had estates that were taxable, according to the Congressional Budget Office.

And in 2023, the IRS exempted up to $12.92 million from the estate tax – an 7.1% increase from 2022.

Many of the wealthiest Americans have signed the Giving Pledge, which started in 2010 with 40 of the wealthiest Americans vowing to give up a majority of their wealth to help societal problems. Members include Warren Buffett, Bill and Melinda Gates and Jeff Bezos.