There’s good news on the way for hotel chain heiresses Paris and Nicky Hilton and many of the world’s wealthiest people.
The Wharton School recently launched the Wharton Global Family Alliance, an initiative which combines research, teaching and outreach to create resources for families at the “pinnacle” of wealth.
The WGFA works in collaboration with the CCC Alliance — a network of approximately 60 families from across the world with wealth ranging from hundreds of millions to billions of dollars.
Along with business management, the WGFA plans to study how to best manage the wealth and philanthropic gifts of the world’s wealthiest families.
WGFA’s executive director, Todd Millay, said that it is important to take the lead in researching and directing the philanthropy of wealthy families because they “have often led the way” in the creation of social institutions.
Trevor Prichett — a first-year MBA student — said that the study of wealth management is important to family businesses because “along with wealth comes responsibility.”
“Without [family philanthropy] we wouldn’t have UPenn or places and institutions like it,” Prichett said.
Wharton is currently only offering one class in the field, but the WGFA hopes to launch more courses in upcoming years.
The program is focused on developing research that is “relevant, important and actionable,” according to Management professor Raphael Amit.
Last December, Amit and Harvard Business School professor Belen Villalonga published the first paper to come out of the WGFA.
Their research showed that companies whose founders served as their CEOs maximized their profits. They also found that when a successor is serving as the company’s CEO, the company’s profits are typically adversely affected.
Before the creation of the WGFA, family business as an academic field was “under-researched and underdeveloped” given its eminence in the business world, Prichett said.
In fact, approximately 35 percent of the businesses in the S&P; 500 are controlled by a family.
Despite the present lack of research in the field, members of the WGFA are confident that other business schools around the country will soon follow suit.
“Traditionally people have copied us,” Amit said, citing the fact that Wharton was the first school to research entrepreneurship is emerging as one of the most popular areas of business study.
