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Thu, Feb 10, 2022
In 2020, global philanthropic giving around the world totalled approximately $750 billion and about $175 billion of this came from ultra-wealthy individuals, according to a report by Wealth-X.
The donations have the potential to shape and transform the lives of millions in areas as diverse as education, healthcare, the arts, housing, social equality, climate change and the environment. Donors or benefactors in this expanding global ecosystem of philanthropy comprise institutions, corporations, public foundations, governments, private foundations of the affluent and individuals across the entire wealth spectrum. The main recipients of giving include non-profit organizations, charities of all kinds and education providers.
The ultra high net worth (UHNW) individuals, who have a net worth of $30 million or more, account for a substantial 36% of all global individual giving. With an average total donation of $590,000 per UHNW individual, there are significant gains to be made from formulating the right relationships with a few key people, the report, which focuses primarily on the philanthropic activity of global UHNW individuals, said.
In 2020, this exclusive group numbered 296,930 individuals -- just 1.1% of the global millionaire population -- yet donated an estimated $175 billion, or almost a quarter (23%) of total annual giving, said the report.
Total giving by the ultra-wealthy rose by a solid 4.1%, outpacing the growth of 2.9% in non-UHNW individual giving and a 1.5% increase in donations from institutions and public foundations. This increase, in spite of the effects of the pandemic, emphasises this group’s robustness as a source of financial contributions, it said.
North America accounted for more than half of all global ultra-wealthy donations. Total donations of $91 billion — including $85 billion from the US ultra-wealthy alone -- reflect the region’s elevated wealth and its longstanding tradition of public giving, among other factors, the study said.
While UHNW donors in North America, Europe, and Asia show characteristic differences, across all three regions the vast majority of these donors are men and are mainly self-made (though somewhat less so in Europe), their average age in North America (68) is eight years older than in Asia.
Banking and finance is the most common primary industry. A full-time focus on non-profit and social organizations comes second in North America and Europe, but does not feature highly among Asia’s ultra-wealthy donors.
Education is, by some distance, the most popular philanthropic cause and this preference is particularly pronounced in Asia.
The ultra-wealthy with private foundations tend to be older and wealthier on average than their major philanthropist counterparts. Among the latter, a greater proportion has created their own wealth.
A strong tradition of state-backed welfare systems in many countries has typically constrained US-style public giving in some areas. However, changes to individual expectations and the capacity (and desire) of some governments to fulfill this traditional role, are causing a gradual shift. Despite having a larger ultra-wealthy population than Europe, Asia accounted for a 12% global share in UHNW giving, with a total of $21.5 billion in 2020. Europe's ultra-wealthy accounted for $52 billion, equating to a third of global UNHW giving.
Against the backdrop of a world still grappling with the fallout from the Covid-19 pandemic, philanthropic giving by the wealthy is an expanding area of focus for many non-profit and education organizations’ fundraising departments.
The report, Wealth-X's sixth on philanthropic giving, explores global philanthropy, charting the significant role played by the ultra-wealthy because of the scale of their giving.
In this context, the report touches on society’s growing expectations of this group’s responsibilities, given rising inequality and surging UHNW wealth.
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