Study of U.S. and U.K. Wealthy Shows Generosity Still High
(July 21, 2009) A report published this month by Barclays Wealth indicates that high net worth donors in the United States and the United Kingdom continue to give generously despite the bad economy.
Wealthy investors in both the U.S. and the U.K. have been hit by declining company valuations, stock markets and house prices, bringing about concerns that charitable donations would suffer, the firm notes. However, research shows that this may not be the case.
The Barclays report, titled Tomorrow’s Philanthropist, indicates that the wealthy consider philanthropy a key expense and would sooner give up comforts before cutting back on charitable giving.
While high net worth individuals have cut back their donations by 2.2 percent, research shows young donors have increased their donations by 3 percent to 4 percent to help charities survive the downturn.
More than three quarters (77 percent) of high net worth individuals surveyed in the U.S. and the U.K. said that they would not decrease their level of giving in the current downturn.
“According to the report’s findings, there is a remarkable resilience among wealthy givers,” noted Matt Brady, head of wealth advisory at Barclays Wealth. “The fact that we’re seeing levels of giving maintained in such a challenging economic environment is a real statement of intent and underscores the importance of philanthropy.”
Self-made wealthy individuals are becoming increasingly active in their philanthropy, seeking to apply their business expertise, networking and fundraising skills to solve the social problems of the day and drive change. Forty-five percent of high level donors (i.e., donors that donate in excess of $10,000) prefer to give their money away during their lifetime, so they can witness its impact on society. The increased involvement of wealthy individuals will have direct impact on the way charities operate, including:
- Increased demand on charities to provide greater evidence and transparency in how they spend their money (78 percent of high net worth donors don’t consider charities to be efficient organizations).
- In an effort to achieve greater impact, charities and individuals will leverage their use of the Internet as a platform for giving.
- Wealthy individuals are increasingly using professional advisors to help determine how they achieve the greatest possible impact with their donations.
“The report underscores just how important major giving has become now in the current economic situation,” said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. “With donors increasingly less likely to give to new causes, nonprofits need to be focusing on current and previous donors, and major donors—who typically give several times before making a major gift—have the capacity and the will to make substantial gifts that can make a significant difference in this recession. Nonprofits simply must be implementing major gifts programs now, or else they stand to lose out on major opportunities.”
Tomorrow’s Philanthropist, a report by Ledbury Research for Barclays Wealth, polled 500 high net worth individuals in the U.S. and the U.K. in May. Click here to download the report.