08 April 2010

Philanthropy:
Barriers to Giving

• 56% of high net worth individuals say family values play a key role in levels of giving
• 97% give to charity
• Financial security, the government and charities' efficiency prevent high net worth individuals from giving more

A new report from Barclays Wealth, a leading global wealth manager, reveals that no matter how wealthy individuals have made their money, whether it is from hi-tech industries, media or through inheritance, when it comes to charitable giving, most return to traditional values.

Familial duty (56%), religion (46%) and societal duty (42%) are key factors which motivate donors to give large sums of money to charity (more than £10,000 a year). Those that aren't motivated by these factors are three times more likely to give only at low levels (less than £1,000 a year).

There is also a universal desire to donate, with 97% giving to charity in some form. However, the report 'Barriers to Giving', which surveyed 500 wealthy investors in the UK and US, also reveals that only a third will donate more than £10,000 a year - less than 1% of their net worth.

The primary reasons why they do not give more include:

• Charities' efficiency
• Financial security
• The role of the state

Emma Turner, Head of Client Philanthropy at Barclays Wealth, commented: "High net worth individuals today are a very diverse community of people, having accrued their wealth through a huge variety of different sources, from technology to inheritance. However, the findings of this report show that despite these differences they are predominantly motivated by values which are deeply rooted and traditional in nature, like family and religion. As charities seek to understand how they can work more closely with this complex group, it is crucial that they understand what is stopping them from giving, as much as they focus on what is motivating them to give".

Charities' efficiency under the spotlight

Over half (53%) of those surveyed believe that charities are inefficient in managing donations. Efficiency, and the amount spent on administration are cited as the most important factors when selecting a charity to support (89% and 88% respectively). This barrier is also something that looks set to remain in place, with 82% agreeing that "Charities will be forced to become more efficient as people begin to demand greater efficiency from the causes they give to".

Financial security

Half (50%) of the high net worth individuals surveyed give because they feel they can afford to do so. This is not surprising given the levels of personal wealth associated with this group, but this is also subjective. Many will wait until they feel financially secure before donating.  40% of those with investable assets between £0.5-1.0 million will give less than £1,000 a year to charity; and it is only when people have more than £3 million to their name that they are likely to become major donors, with 55% giving over £10,000 a year.

The role of the state

Many wealthy individuals believe that the state has a responsibility to increase charitable donations. Over half (52%) of those surveyed said that the most effective way for the state to encourage donations would be to increase tax breaks to offset charitable giving. However, 59 % said that distrust in political processes has led them to give directly to charities (as opposed to indirectly, through taxation) as they feel this will mean their money makes a bigger impact.

The recent performance of the global economy has often been identified as a significant barrier to giving. However, 49% of respondents said that they are planning to give the same amount to charity as the previous year, and 26% were planning to increase their donations. More importantly, the research found evidence that the economic downturn has galvanised many respondents' attitude to giving. Over a third (35%) of wealthy individuals are "More passionate in supporting charitable causes in an economic downturn, when they are struggling for funds".

For further information contact:

Barclays Wealth, Corporate Communications
Lucy Davidson +44 (0) 20 7114 9813

Cohn & Wolfe
Will Spratt +44 (0) 20 7331 2367 / 07947 427312
Hannah Mercer +44 (0) 20 7331 2359 / 07956 606 662

About this report
'Barriers to Giving' was authored by Ledbury Research on behalf of Barclays Wealth, to understand in more detail what is holding the wealthy back from giving more to charity, in the UK and the US.

Methodology
The report is based on detailed analysis (including key driver techniques) by Ledbury Research, derived from a large scale study of 500 high net worth individuals in the UK and US (all with investable assets of over £500,000/$1m), including over 150 ultra high net worth individuals (all with investable assets over £3m/$5m).

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