With philanthropy in the UK at its lowest level since the beginning of the financial crisis, the latest survey by JP Morgan Private Bank on ultra-high net worth individuals’ charitable habits hasn’t given much to cheer about.
The survey, which questioned around 100 UK-based UHNW clients of the bank, revealed that around half of them give over 5% of their wealth to charity, while three-quarters give regularly to charitable causes.
But according to the respondents – who together have an estimated wealth of £6 billion – the government’s tax rules need to be simplified to encourage more giving. Nearly 30% of the UHNW clients surveyed said they would be more charitable if they were provided with better tax incentives.
These results are supported by the findings of the latest Sunday Times Giving List published in early May. According to the list of the top 100 philanthropists in the UK, total donations have fallen to £1.67 billion from almost £2.5 billion last year – a 33% drop as the super-rich saw their fortunes plummeting following the financial crisis.
But the JP Morgan survey sheds light on what can entice the UHNW philanthropists to give more – passionate causes, rise in wealth and better awareness about how their money was spent were a few leading factors.
Rebecca Eastmond, head of EMEA philanthropy at JP Morgan Private Bank said: “The most successful philanthropists find a cause that they can feel passionate about and which aligns with the skills and resources that they can bring to the table and which is in an area where help is sorely needed.”
The contributions of the UK’s UHNWs are lower than their American counterparts. A survey of the top 50 American philanthropists in 2010 by US-based The Chronicle revealed that their combined total, although a drop from the previous year, was at £2 billion ($3.3 billion) – comparatively higher than what UK philanthropists give.
One reason for this is the more flexible tax measures in place in the US – some of them include income tax relief for gifts of private property and tax reduction on donations made.
Nice article, but I would like to address some concerns regarding this issue. Recently, Berkshire Hathaway Chairman Warren Buffett have proposed “shared sacrifice” from the rich people like him to help fuel the economy in US by letting the Bush tax cuts expire and going back to fair taxation (Article found here: When Warren Buffett says tax me, do people listen?). I would say that most, if not all of the rich individuals, have been giving a lot for these charitable organizations and institutions even before the plummeting of the economy. It’s kind of a surprise coming from the rich man himself, but I think Buffett simply acknowledge the current status of the state budgets and that something - a lot of things, actually - must be done to make the recovery from all those debts. While other people would be too busy making money from their country even more so now that the economy is not doing well, it’s also a fact that money hoarded by a few individual million/billionaires must find it’s way to circulate in the economy and refuel it.
Whether that will help the charitable institution indirectly is unsure and might take a while, but it’s possible that the additional burden from fair tax could indirectly affect their contribution to the outreach programs. I find it kinda ironic that all the middle and lower class citizens are calling out for the wealthy people to give back their fair share to the society, when a lot of them doesn’t even contribute to charities out of self necessities and financial security.