Barriers to Giving, a new report released by Barclays Private Bank, finds a ‘lack of faith’ between high net worth individuals (HNWIs) and charities is one of the greatest obstacles to philanthropy outside the US.
Recent figures revealed that almost half (47%) of multimillionaires outside the US donate less than 1% of their annual income to charitable causes compared with 2.1% within the US which is having a considerable impact on charitable funding. If every individual in this group was to increase donations to 1% of their income, there would be an additional £800 million in annual global funding for charitable organisations.
New research, commissioned by Barclays Private Bank and undertaken by global intelligence business Savanta, identifies an underlying sense of ‘us and them’ between HNWIs and charities, driven by a lack of understanding and poor communication. This has a detrimental impact on the potential for HNWIs and charities to develop mutually beneficial partnerships over the longer term.
One in four wealthy individuals state a lack of faith in how charities are run, and a lack of control over how money is used 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 HNWIs are also identified in the report as barriers to major giving. The assumptions that HNWIs 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.
Barriers to Giving also found that:
- 75% of HNWIs believe philanthropy is a responsibility of those wealthier than themselves
- 54% believe that it is the responsibility of the government or state to support charitable organisations’ causes
- 42% believe that making extra donations wouldn’t be large enough to have a significant impact
- 23% of HNWIs cite a lack of knowledge, experience and contact with the charity sector as a hurdle to overcome when considering large donations
Emma Turner, Director, Philanthropy Service at Barclays Private Bank, said: “Barriers to Giving reveals a lack of alignment on how HNWIs and charities can collaborate to deliver real change. We are committed to supporting our clients to map out giving goals that align to their values and personal ambitions, with the same careful consideration that goes into making any other investment. We know that life’s success isn’t just about financial gains. Philanthropy – using your money for good – is an investment which delivers a different, but equally important kind of return.”