How to build a better culture of philanthropy

As part of its Inside Giving series, the Charities Aid Foundation (CAF) recently published research on the size of the UK’s wealthy population and how much it gives to charitable causes. Its new report, High Value Giving: How the UK’s Wealthy Give, also reveals the importance of building better relationships with donors and highlights the astounding, untapped potential of HNW individuals when it comes to creating a society that works for us all.

The UK’s HNW profile

The report, based on publicly available information, provides data on how many HNWs support UK charities and what their combined philanthropic giving is worth. It estimates that 1% of adults in the UK are HNW, which means they have at least £1m worth of investable assets, outside of their main property and pension funds. One in ten of these are defined as very HNW with assets of £5m-£10m – and just 1% of all HNWs are Ultra High Net Worth (UHNW) with available investable wealth of £30m+.

“This illustrates the staggering potential of home-grown HNW philanthropy,” says Gifted’s Chief Executive, Amy Stevens. “There are 536,673 HNW individuals in the UK with combined assets of £2tn. Their collective philanthropic giving amounts to £7.96bn, but this would more than double to £19.9bn if everyone in this community gave just 1% of their investable income.”

Do we really know our donors?

As consultants, we’ll often emphasise how important it is for charities to know their donors and understand what motivates them to give. Interestingly, this report shows that the average age of the most generous donors in the UK is around 63 with just 29% of these being women. It also reveals that the biggest givers are two and a half times more likely to have inherited their wealth.

The research includes some insightful data about the causes HNW individuals prefer to support. Whilst there seems to be little difference by wealth level, it’s clear that compared to the wider public, wealthy donors often favour education as a philanthropic choice. The report claims that as many as six in ten HNW individuals in the UK have given to education, whereas only 4% of donors from the general public tend to support this sector.

Making it easy to give

Alongside getting to know your HNW prospects and donors better, it’s also important to facilitate flexible ways of giving. CAF’s research points to a growing trend amongst HNWs when it comes to harnessing “non-cash or illiquid assets for charitable purposes.” Sharing data from CAF’s own donor base, it shows how being able to accept complex gifts (stocks, shares, property or artwork), legacies and social investing, can transform a charity’s impact.

“It’s fascinating,” says Amy. “We know how important it is to have multiple giving mechanisms available to donors, but the evidence from CAF’s private clients underscores the value of laying out the options and demonstrating a confident grasp of tax efficient giving, sometimes across different jurisdictions.”

It’s all about trust

One thing we love to hear at Gifted is that our clients’ donor communities are flourishing on trust. The CAF report underlines just how important this is; from the difference it makes when you really consider a giver’s areas of interest, to the strength of relationship that grows from understanding someone’s family set-up or their specific approach to privacy. Relationship building is everything. It has the power to push philanthropy way beyond its current sphere of influence and build meaningful partnerships that benefit everyone.

If you’d like to know more about forging better relationships with new and existing givers, or your charity needs advice on installing different giving mechanisms for your donors, get in touch. Just ask for an initial, no-obligations conversation with one of our Directors.