Giving while living' trend creating demand for philanthropy advice, says new wealth report

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

More of the world's rich are opting for ‘giving while living’ strategies, according to the just published World Wealth Report 2010 from Merrill Lynch-Capgemini. It says philanthropists are incorporating their giving strategies into their ongoing wealth accumulation and capital-preservation plans.

And the trend puts increasing pressure on wealth management firms and advisors to understand a wide array of issues related to philanthropy in order to provide relevant solutions, says the report, as charitable giving considerations are pushed “farther into the purview of wealth managers and potentially away from estate planners that typically manage bequests.”

Several wealth management firms are already beginning to build expertise in-house or leverage third-party ventures more extensively, and offer these capabilities to their clients to aid in their continuing philanthropic efforts and many are featured in Philanthropy UK's guide to philanthropy advisors.

"Our financial advisors are seeing more and more a willingness and an understanding on the part of their clients that their philanthropic intentions need to be part of their broader wealth management plan," Chris Dupuy, head of institutional investments and philanthropic solutions for Bank of America Merrill Lynch is reported as saying.

In the UK, Dame Stephanie Shirley, philanthropist and the first ever government appointed ambassador for philanthropy, heads up a newly-convened philanthropy advice steering group working to develop and encourage the take-up of philanthropy advice services for wealthy individuals. It comprises representatives from over 30 private client advisory and specialist philanthropy advisory organisations.

Commenting on the report she says, “We project the giving while living development will drive, by necessity, more and more advisors to train up on best practices across the platform of philanthropic services. Otherwise their clients will seek out advisers that offer the most up to date strategic advice.”

The World Wealth report, based on surveys with more than 1,100 wealthy investors, also reveals philanthropy by the world's rich recovered in 2009 in all regions but North America after undergoing a sharp drop the previous year due to the global financial crisis.

The report found more than 80% said they gave to charity because it is socially responsible, while social networking and tax benefits were given as lesser reasons.It shows donors are making more investments rather than gifts and looking at their philanthropy just like they would look at their investment portfolio, including looking for a return on every dollar.

The ‘giving while living’ trend is explored in a new report of the same name from Atlantic Philanthropies, which aims to inspire others to follow in the steps of its founder Chuck Feeney and enjoy the pleasure of actively giving their funds, skills and time during their lives.

It includes profiles of Feeney and 10 other philanthropists who are giving generously during their lifetimes, explains the most-cited motivating factors for giving while living, and lays out a range of ways to set up and execute a giving while living programme.

Feeney, 79, is hoping to promote ‘giving while living’ to wealthy people in Ireland and appeared in a documentary to that end last year, talking about how he made and then anonymously gave away a multi-billion-dollar fortune, including $1.2 bn (£790m) to Irish causes.

Atlantic Philanthropies gives around $400m (£264m) per year and its endowment currently stands at approximately $3 bn (£1.98 bn). The foundation is on course to spend out its endowment by 2016.

“Atlantic Philanthropies is the biggest single giver in Ireland. Because of their limited lifetime, there will be a huge hole when they close and they want to help deal with that now by encouraging giving,” says Jackie Harrison, chief executive of Philanthropy Ireland.

The World Wealth 2010 report is available from the Capgemini site.