Philanthropy: The New Prada? Competitive Altruism And The Rise Of Philanthropy As The Ultimate Status Symbol

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The Native American Kwakiutl tribe has an unusual practice called potlatching, where tribal chiefs compete to give away their possessions. Strange, but the person who is able to give away the most resources is regarded as the highest-standing member in the group. Anthropologists have observed similar cases of "altruistic signaling" in numerous hunter-gatherer societies, including the Aché of Paraguay and the Meriam of Australia.

Competitive altruism perforates across historical and contemporary cultures, from the sponsorship of trans-Atlantic voyages and opulent operas by European royals, to conspicuously large donations made by modern-day tycoons such as Ted Turner and Bill Gates, and the small-town housewife's desire to be the nicest dinner-party hostess. Research has shown that self-sacrifice for the benefit of a group of strangers increases the self-sacrificer's status in that group, including the likelihood that the person will be selected as a leader. And in cities like New York, London, and Hong Kong, countless charity galas demonstrate that "being nice" can certainly be a display of social status.

All around the world, there are signs that philanthropy is the new Prada. Logomania is out -real ultra high net worth individuals now find it distasteful to have big, bold luxury brand logos all over their clothes and handbags. But those who can afford to have parks, libraries, museums, and educational institutions named after themselves and their families are on an entirely different plane.

While consumption of high-end automobiles, jewelry, and clothing surely still elevate - or at least create the impression of the elevation of - one's social status in the twenty-first century, evolving social norms suggest that high social status can be attained through the demonstration of big-ticket philanthropy. The Slate 60, a list compiled by the Chronicle of Philanthropy, encourages America's wealthiest to be as competitive about their giving as they are about private jets and summer homes.

In the years since the Buffett-Gates Giving Pledge, having your own grantmaking foundation is the ultimate signal of high social status, achieving far beyond what luxury goods can in signaling prestige, luxury, and exclusivity. As Samuel Goldwyn once said, "There is no greater duty, nor pleasure than that of giving help to others." And neither is there any greater honor.