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10.02.2015 01:12 Age: 37 days

What gives?

Emma-Jane Weider and Morgan Kainth


Emma-Jane Weider and Morgan Kainth discuss the changing philanthropic environment.

 

Philanthropy is constantly evolving in terms of vehicles for charitable giving, demographics, distribution, methods of participation, and interaction between donors and organisations. Indeed, there have been several reports illustrating the changing face of philanthropy over recent years, including annual commentaries on major gifts, such as the Million Pound Donors Report from Coutts, and more general surveys on the state of giving, such as the World Giving Index, published by the Charities Aid Foundation.

 

New vehicles for giving

Those who participate in philanthropic activity often have the means to influence developments in the sector. Particularly noticeable in this regard has been the increased popularity of social investments and social enterprise organisations, often championed by the latest generation of entrepreneurial wealth. These structures blend business and philanthropy, frequently combining a profit motive or business case with a solvable social problem. Over the past five years, there has been an explosion of interest in this area, as recognised by the announcement of a new UK social investment tax relief to further increase the appeal of this sort of structure.

"Women have been found more likely to give money than men in high-income countries

Some members of this ‘new’ generation of philanthropists – new in terms of school of thought rather than age – are also looking for alternatives to traditional grant-making vehicles such as charitable trusts and foundations. The UK is slowly catching up with the US in the uptake of the donor-advised fund model, whereby individuals or families can, tax effectively, make gifts to charities all around the world through another registered entity, where the set-up costs of a standalone structure, the legal burden of trusteeship, or the administrative hassle of recording donations may be disproportionate in the circumstances.

Additionally, donors are combining their efforts and forming collectives, such as giving circles, which provide a network of like-minded individuals who can learn from each other and make informed decisions around giving. Though the charitable sector is generally increasing its transparency, the personal nature of philanthropic giving means donors are often not satisfied with financial statements and reports – anecdotal and peer-based evidence is also valued.

 

Demographics

Some of these noticeable changes in donor behaviour have been attributed to the increasingly influential role of women in philanthropy. The 2010 and 2011 Study of High Net Worth Women’s Philanthropy, by the Women’s Philanthropy Institute at Indiana University and Bank of America Merrill Lynch, found that single women are more likely to give charitably than single men. Additionally, female-headed households were found not only more likely to give, but also to spend more time on due diligence before making decisions about giving, and to view giving as collaborative. A recent World Giving Index report suggested women are more likely to give to charity and men are more likely to volunteer – both invaluable and integral elements of philanthropic capital.

It is also interesting to note women have been found more likely to give money than men in high-income countries, whereas, in middle- and low-income countries, men are more likely to donate. This may well simply be a reflection of the economic gender disparity that tends to exist worldwide. Nancy Heiser, Vice President of Wealth Management at UBS, suggests that the increased participation of women can be put down to a few simple facts: ‘Women are living longer, making more money and may be inheriting twice – once from their parents and again if they outlive their spouses.’

The social power of women can be seen in the rise of the philanthropic couple. While the earliest philanthropists were often individuals or entire family groups, couples are now some of the highest-profile and most active philanthropists – Bill and Melinda Gates, Mark Zuckerberg and Priscilla Chan, and Michael and Susan Dell to name a few.

We are seeing a rise in the number of women who specifically fund women by way of social enterprise, volunteering and skills-based giving, alongside the more traditional grant-making process. We are also seeing collaboration and sharing between donors and donor communities being spurred on by technology and increased scrutiny of charitable bodies.

As advisors, it is crucial to understand that, whatever the characteristics or passion of a potential philanthropist, the means and outcomes are based on something very personal. What is vital is that advice is always specifically tailored for the recipient.

 

Resource:

www.step.org/what-gives