Internet Millionaires’ Giving Behavior Profiled in New Book

By STEPHEN G. GREENE

Most millionaires who made their fortunes in the Internet economy

give to charity — and their philanthropic activity is likely to expand considerably over time, say the authors of a new book called eWealth.

Four out of five people surveyed for the book, each of whom had amassed at least $1-million in liquid assets working at an Internet-related company, already make such donations, the authors report, and an additional 15 percent say they intend to do so.

The authors, Russ Alan Prince and Hannah Shaw Grove, project a steady climb in the number of “electronic millionaires,” regardless of fluctuations in the fortunes of particular companies. They estimate that by the end of 2006 there will be more than 125,000 such people across the globe, holding nearly $3-trillion in liquid assets.

Mr. Prince, whose consulting firm specializes in research about private wealth, and Ms. Grove, who is head of retail marketing for Merrill Lynch Investment Managers, based their findings on interviews with 652 millionaires, who collectively represent $13.2-billion in liquid assets. Their fortunes are newly minted: Nearly half were created since 1998.

Sources of Wealth Matter

Participation in philanthropy varies, the authors report, depending on how the millionaires made their fortunes. Ninety percent of the people who gradually built their fortunes out of their businesses´ cash flows, for example, currently give to charity, compared with 70 percent of those whose fortunes came from the sale or trade of their privately held companies, and 65 percent of those who made money overnight when their companies went public.

Similarly, the Internet millionaires also show differences in the causes they support. People who became wealthy after the initial public offerings of their companies, who tend as a group to be younger and wealthier than those in the two other groups, are likely to favor such causes as AIDS research or environmental protection. Those whose fortunes accumulated out of cash flow are older and tend to focus support on traditional causes, such as education and religious institutions.

Copies of the book, eWealth: Understanding the Internet Millionaire, are available for $150 apiece through the Web site of Institutional Investor Newsletters, http://www.iihighnetworth.com. Multiple-copy discounts are available by contacting Monica Musial by phone at (212) 224-3524, by fax at (212) 224-3491, or by e-mail at mmusial@iinews.com.

PHILANTHROPY AND HIGH-TECHNOLOGY MILLIONAIRES