philanthropists expect to see their hefty donations bear fruit in their
lifetimes, as a trend toward effectiveness within philanthropy gathers
pace, according to a recent gathering of some of the world’s wealthiest
The Forbes 400 Summit – which aims to drive the habits of the
leading philanthropists through peer exchange – found that rich donors
are increasingly happy to partner with each other, with companies, and
with recipients so that they can see greater and faster results.
The event included keynote speakers and famed philanthropists
Gates, Warren Buffett and Oprah Winfrey. Topics such as the sharing of
best practices and upfront education arose – on which there is more and
more focus in the philanthropic community.
As H King McGlaughon, chief executive of Foundation Source,
recently on his firm’s rebrand, the world of philanthropy has changed
“dramatically” over the last decade, with much greater focus nowadays on
community, knowledge sharing and collaboration.
Philanthropy as a “risk venture”
Alongside the summit, Forbes has released a report sponsored by
Credit Suisse, Next Generation Philanthropy: Changing the
One of the key findings is that many philanthropists view the portion
of their wealth they plan to donate as “risk capital,” and as such they
are willing to consider “venture-like” giving, deploying the capital in
projects that may fail, but which they can learn from for future
Tying in with this notion, over half of respondents aim to be
business-like in their philanthropy, and want to actively use their
experience in business in the philanthropic world. This desire tends to
be more prevalent the higher up the wealth scale, said Forbes. This is
perhaps unsurprising given the large sums of money involved: over half
the people involved in the study plan to leave more than a quarter of
their assets to charity.
This focused, business-like approach also leads to expectations
measurable returns within a set time frame. In fact, nearly half of
respondents at the summit have set a time horizon of under 10 years to
see a return on their investment. This is creating demand for new ways
of tracking the impact of gifts, and 62 per cent of respondents say they
currently use some form of tracking, such as the Impact Reporting and
Investment Standards and the Global Impact Investing Ratings System.
Businesses also emerged as a popular partner for
endeavors, with 40 per cent of donors saying they partner with
businesses for projects, compared to 28 per cent who partner with other
non-profits and 22 per cent with government agencies.
Taxes – a hot topic in light of the forthcoming presidential
elections – were also seen as a driver of philanthropy by the rich
respondents. Over half (56 per cent) felt that tax policy does have an
impact on their giving habits.
Despite these more rational reasons for giving, respondents
that the central motivation “comes from the heart,” with 70 per cent
saying they are driven by personal values, 36 per cent by faith, 35 per
cent out of a sense of duty or obligation, 32 per cent to leave a family
legacy, and 31 per cent to add value to society.
Some of the things philanthropists consider when it comes to
are: the organizational structure of giving, collaborations, vehicles of
funding, measuring success and “passing on the torch” to the next
generation, the report found.
The next gen
Today’s philanthropists believe they are setting an example
future philanthropists, according to the survey, and nearly half have a
succession plan in place. Of those with investable assets of over $50
million, 59 per cent have established a philanthropic entity, and most
want to see this continued by their descendants.
In fact, tomorrow’s philanthropists are already getting started,
this week in New York a large group of young philanthropists will gather
from around the world for the Nexus Global Youth Summit. The group has a
combined net worth of some $100 billion, the organizers said.
The goal of the summit is to create a network encompassing
wealth holders, young innovators and “movement builders,” with the
purpose of transforming global philanthropy and social
entrepreneurialism. The speakers and topics billed for the event
illustrate just how discerning, and how global, next-gen philanthropists
As Money K, head of Citi Private Bank’s next-gen program recently told Family Wealth Report, the next gen has a “wanderlust” when it comes to business and entrepreneurship.
The Forbes study surveyed 264 high net worth individuals across the globe, including the US, China, Japan, India and the UK.