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UK Millionaires Wary Of Philanthropy, Lack Confidence In Sector - Barclays Study

Tom Burroughes

22 November 2019

UK multi-millionaires often give only a slender fraction of their wealth to charity, suggesting that HNW individuals are not confident about whether contributions get results. There is a major communications breakdown, a report by reveals a lack of alignment on how HNWIs and charities can collaborate to deliver real change. Barclays Private Bank is uniquely positioned to undertake this challenge; not only does our expertise bring a deep understanding of the HNWI landscape, but Barclays also banks one in four charities in the UK," Emma Turner, director, philanthropy service at Barclays Private Bank, said.

The report comes at a time when thoughts often turn towards giving, such as around Thanksgiving in the US and Christmas in the UK, and others. A raft of wealth management firms such as UBS, BNP Paribas, Coutts and Barclays make a point about offering philanthropy advice as part of their offerings. (This publication is running a series of features on the topic in the coming days.)

Research finds that only half (50 per cent) of UK multi-millionaires donate 1 per cent or more of their annual income to charity. Philanthropic donations equate to only 0.5 per cent of national gross domestic product, while in the US the figure is 2.1 per cent.

If every multi-millionaire in the UK was to increase donations to 1 per cent of their income, there would be an additional £46.4 million ($59.8 million) in national charity funding each year.

The study includes results from a survey of more than 400 HNW individuals in wealth markets outside the US including the UK, France, Germany, Italy, Saudi Arabia, the UAE, Hong Kong, Singapore and India. All participants held assets of £5 million or more. To make sense of the findings, report author Savanta interviewed more than 25 experts and intermediaries from across sectors connected with philanthropy.

One in four wealthy individuals state a lack of faith in how charities are run (25 per cent), and a lack of control over how money is used (27 per cent) as major reasons that prevent them from donating more to charity. Scandals involving reputable charities have furthered this lack of trust and the assumption that such issues are widespread within the sector.

Charities’ current perceptions and methods of engaging with HNW individuals also create headwinds, the report said. The assumptions that HNW individuals often demand “too much control” over their donations and that they can “always give more” are cited as contributing factors to the problematic ‘us and them’ mentality.

Among other findings, the report said that 74 per cent of HNW individuals think that  philanthropy is a responsibility of those wealthier than themselves; 46 per cent said that it is the responsibility of the government or state to support charitable organisations’ causes; 35 per cent said that making extra donations wouldn’t be large enough to have a significant impact, and 24 per cent of HNW individuals cite a lack of knowledge, experience and contact with the charity sector as a hurdle to overcome when considering large donations.