‘Class traitors’: Why rich Bay Area millennials are getting rid of their wealth

Clemmy Brown’s family fortune started with her great-grandfather – the founder of Whirlpool appliances – and grew as his descendants invested and passed down their wealth over generations.

But that stops with Brown. Instead of buying property or stocks, the 36-year-old psychotherapist gave away her inheritance – all $1.2 million. And she moved in with her parents in San Francisco, to live on a salary of roughly $50,000 a year.

Brown is part of a growing group of young, affluent, predominantly White Bay Area residents embracing wealth redistribution – a radical practice of giving that encourages people to disperse all of their inherited or excess income. The idea is to spread that extra capital among people who don’t have enough, particularly in indigenous communities and communities of color.

These self-described “class traitors” are taking on the massive wealth inequality in the Bay Area, where thousands live without homes while others swim in tech-industry wealth. They’re also assuaging the guilt they feel for ending up on top in a society where people of color and people from low-income neighborhoods have less access to education, high-paying jobs and other resources. In Silicon Valley, the richest 25% of households control 92% of the region’s wealth, according to the Joint Venture Silicon Valley Index. A quarter of households have less than $5,000 saved or are in debt.

“I can see in the world how bad things are,” Brown said. “There’s something that feels very wrong about holding onto money that you don’t actually need.”

Wealth redistribution raises millions in the Bay Area each year for progressive, grassroots organizations that may be too small or radical to receive philanthropy from traditional sources. It’s contributed hundreds of thousands of dollars to Poor Magazine, allowing the scrappy group of homeless and formerly homeless activists to buy two properties in Oakland that will house people in need. It helped the Sogorea Te’ Land Trust, which returns East Bay land to indigenous people, buy its first house last summer. And it has funded causes ranging from the rights of incarcerated people, to environmental justice, to racial equity.

Donors are organized by groups like Poor Magazine’s People Skool, which launched in 2009 to teach those with wealth and class privilege about the injustices of capitalism. After attending in 2018, Brown donated $265,000 to the group.

“There are people who have no homes who literally die on the street every day,” said Poor Magazine founder Lisa Gray-Garcia. “And for that to continue, while people continue to hoard wealth, is violence. We are responsible for our fellow humans and on some level, in some way, everybody should be radically redistributing.”

Embracing that stance can be difficult and uncomfortable. Donors are asked to unlearn everything they were taught about finance – including the basic premise that it’s good to save and invest. Giving away large sums in their 20s and early 30s also can have consequences for donors years down the road, potentially interfering with their ability to buy a home or retire. And it can strain relationships with parents and grandparents, who often don’t approve of giving away the wealth they worked so hard to pass down.

Ella Taylor, an Oakland-based financial planner and coach, said between 30% and 40% of her clients plan to give away their entire inheritance. Taylor, who focuses on socially conscious investing, is happy to help. But first, she makes sure they understand the implications.

“If you don’t have your own self taken care of, I don’t know that giving away all of your money is necessarily benefiting you or society,” Taylor said.

Taylor often works with clients from Resource Generation, a national group whose roughly 200 wealthy Bay Area members pledged to redistribute a total of $14 million last year. Resource Generation teaches them their money isn’t rightfully theirs, because the legacies of slavery and the colonization of indigenous lands likely played a role in its creation. Members age out at age 36 — the group wants to stay young and radical, its leaders say.

Jonah Kagan, 30, was always a little ashamed of his privileged life. When people asked where he went to college, instead of admitting he graduated from Brown on his parents’ dime, he said he studied “on the East Coast.” The feeling persisted when he became a software engineer in the Bay Area. As he questioned the tech industry’s role in gentrifying neighborhoods and pricing out low-income residents, he wondered: Am I part of the problem?

Kagan found a community of like-minded people through Resource Generation in 2019. He gave away $10,000 that year. Two years later, he had given away most of his cash savings – about $210,000.

It was scary, Kagan admits.

“I definitely felt a lot of fear and anxiety about the unknown things that would happen later in life,” Kagan said.

But overall, he feels better. He’s less ashamed now.

Other groups cater to older donors with even more money. Solidaire Network requires a minimum contribution of $20,000 a year. California Donor Table, which focuses on political donations, requires at least $10,000 a year. On the other end of the spectrum, Blue Heart allows members to dip a toe in with monthly donations of as little as $5.

The Bay Area is a major epicenter of the movement.

Instead of letting wealthy people choose where their money goes and how it’s spent, these organizations defer to the marginalized groups who need the funds. Often, donors put their money into a pool and have no direct control over how it’s spent.

“It’s not just the money changing hands, it’s actually the power that comes with the money,” said Ludovic Blain, executive director of the California Donor Table.

Even as a child, 37-year-old Alexis Meisels knew it wasn’t fair that she grew up in a mansion in Short Hills, New Jersey – one of the country’s wealthiest enclaves – while others struggled to survive.

Her father ran and then sold a successful copy machine business, and when he died in 2017, he left her a trust worth $5 million, controlled by her mother. Meisels, who now lives in San Francisco, began receiving an annual allowance of $36,000.

When she joined Resource Generation in 2019, Meisels said it felt like finding something she’d been looking for her whole life. With the group’s support, Meisels pledged to redistribute at least $25,000 each year for at least five years.

Meisels no longer feels as guilty, but she’s still grappling with her relationship to wealth. She’d like to give away her full allowance but admits she can’t quite bring herself to do it yet. First, she wants to build up her savings and retirement accounts.

And her redistribution work has caused tension with her mother, who worried Meisels would give away too much and end up unable to take care of herself.

“It’s hard,” Meisels said. “It’s really hard to do. But it feels like what I’m supposed to be doing.”

Source: Orange County Register