New research finds ‘lack of faith’ between wealthy individuals and charities is a major barrier to giving in the UK
Charity donations amount to 0.5% of UK GDP as research shows a disconnect between charities and HNWI
Barriers to Giving report, authored by Savanta on behalf of Barclays Private Bank, finds a ‘lack of faith’ between high net worth individuals (HNWI) and charities is one of the greatest obstacles to philanthropy in the UK. In response to the issues raised in the report, Barclays Private Bank is partnering with The Beacon Collaborative and the Institute of Fundraising to redress the relationship between wealthy individuals and charities.
Recent figures revealed that almost half (47%) of multimillionaires outside the US donate less than 1% of their annual income to charitable causes. In the UK, the lack of major donors is having a considerable impact on charitable funding; philanthropic donations amount to just 0.5% of national GDP today, compared with 2.1% in the US. In the UK alone, if every multi-millionaire was to increase donations to 1% of their income, there would be an additional £46.4 million in national charity funding each year.
Research, commissioned by Barclays Private Bank and undertaken by Savanta, identifies an underlying sense of ‘us and them’ between HNWI and charities, driven by a lack of understanding and poor communication. This has a detrimental impact on the potential for HNWI 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 HNWI are also identified in the report as barriers to major giving. The assumptions that HNWI 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 HNWI 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 HNWI cite a lack of knowledge, experience and contact with the charity sector as a hurdle to overcome when considering large donations
To bridge the gap between HNWI and charities, Barclays Private Bank is partnering with The Beacon Collaborative, a collective founded to encourage and celebrate major donors in the UK, and the Institute of Fundraising, the professional membership body for UK fundraising. The partnership aims to deliver a step change in giving by building trust and understanding between HNWI and charities. It will support The Beacon Collaborative’s objective to generate an additional £2 billion in donations to charity by 2025. Barclays Private Bank and The Beacon Collaborative will also work with the Institute of Fundraising to deliver a series of events to help fundraisers engage and form long term relationships with HNWI.
Emma Turner, Director, Philanthropy Service at Barclays Private Bank, said: “Barriers to Giving reveals a lack of alignment on how HNWI 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.
She continued: “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.”
Matthew Bowcock, co-founder of The Beacon Collaborative said: “Philanthropy has a crucial role to play in modern society – especially in today’s climate, where inequality has created deep divisions. We are already working alongside a growing force of major givers in the UK, but as this report reveals, there is more to be done to bridge the gap between charities and donors. Strengthening such relationships, with the help of Barclays Private Bank and the Institute of Fundraising, will be essential in meeting our goal to secure £2 billion in annual collective funding by 2025.”
Peter Lewis, Chief Executive of the Institute of Fundraising said: “We’re delighted to be bringing the findings of Barriers to Giving to life for the hundreds of charities we support, with a series of events that will help fundraisers to better understand wealthy donors, and to build more impactful, longer-term relationships with them.”
Download the full report here.
This article was originally published by Barclays – you can read the full article here.