Philanthropy among wealthiest donors is increasing but better financial advice is needed, finds new report

High net-work individuals (HNWIs) have significantly increased charitable contributions in the last five years – through finance, activities and expertise – but believe they need more targeted support from advisers. This is according to research published in two new reports commissioned by Barclays Private Bank, and produced by a partnership of Bayes Business School, Beacon Collaborative and Savanta.

The Modern Philanthropist sampled 500 donors with more than £1 million of investible assets. Questions explored how much they typically gave, where they focused donations, their reasons for giving and their motivations to doing so. A companion report, High-net worth giving in the UK: The giving of the UK’s millionaire population, a five year overview, co-authored by Cathy Pharoah, Visiting Professor at Bayes Business School, estimates the value and trends in annual giving by high net-worth donors over the last five years.

Headline findings include:

• Charitable donations have risen at an average  annual rate of 18 per cent since 2019, adjusted for inflation – with donors typically increasing the number of causes they contribute to from three to four. At the same time, average donations have risen from £5,500 to £12,000 per annum.
• Giving money to charities directly remains the most common way in which philanthropists support charities (73 per cent of the sample ), but philanthropists are increasing their span of giving activities, from regular volunteering (42 per cent) to campaigning and activism (28 per cent) and giving shares, artwork or other goods to charitable organisations (39 per cent).
• Among the most popular causes wealthy individuals support are social welfare (56 per cent) and health (52 per cent).
• Individuals are most motivated to give when a charity’s cause matches a donor’s current interests (36 per cent), they are a well-known organisation with strong understanding of an issue (35 per cent) or when they provide clear information about their goal, approach and impact (32 per cent).
• However, there are three main reported obstacles to giving:
  • concerns about legitimacy and how the charity sector operates
  • difficulty accessing information about a charity’s impact
  • feeling overwhelmed by complexities of charity.

The report sheds light on the vital role of financial advisers, and while 81 per cent want their advisers to initiate conversations with them about giving, just one third have actually held such discussions. This gap, along with a ‘great wealth transfer’ that is set to funnel more money down through generations than ever before, represents a significant opportunity for specialist advisers to prompt more philanthropy.

“Given the importance of HNWIs to the fundraising community, it is surprising how little attention has been paid in the past to how much they give,” Cathy said.

“There needs to be a whole new field of study to help fundraisers and advisers understand wealthy donors much better than we do today. These reports provide a kickstart.”

The Modern Philanthropist highlights a need for tailored advice for those set to increase their wealth in coming years.

“This new research for the first time shows the scale of opportunity to grow major philanthropy in the UK,” Cathy continued.

“It estimates total annual giving by HNW donors at £11.3 billion In 2024. Looking at trends in giving over five years from 2019 to 2024, growth in HNW giving compares very well with other market growth trends.

“These figures have not been identified in previous studies, and result from new approaches to measurement set out in ‘High-net worth giving in the UK: The giving of the UK’s millionaire population’.

“The philanthropy contribution of major donors needs to be fully recognised in ways that will encourage others to give, and to give more.

"The research reveals key features in major giving, for example how the participation of women in giving increases with their wealth, and the strong role played by younger age groups in giving growth. It shows that there is a wide range in the value of major gifts, dominated by a handful of extremely large donations.

“In times of economic turbulence, organisations of all sizes rely even more on charitable giving. Together, these two reports signal how we can improve our understanding of major giving in the UK, and how charities, wealthy donors, financial advisers and policymakers can work together to incentivise its full potential.”

Read and download The Modern Philanthropist report from the Barclays website.

Find out more about philanthropy and responsible business research at Bayes Business School.