Rich need better advice on giving away money

Wealthy donors and would-be donors are finding it difficult to give their money away because they lack good advice on how and where to give it, according to a new study. While many survey participants had a clear idea of what they wanted to achieve, they had difficulty finding qualified independent advisers to guide them in devising a philanthropic programme and selecting suitable recipients.

‘Lawyers and private bankers are very good at providing technical advice, but … cannot tell you if a philanthropy project will provide you with value for money,’ said one participant. Those surveyed said they would be willing to pay for advice and support tailored to their needs.

The respondents, 34 ultra-high-net-worth individuals and family offices set up to manage the wealth of families in the UK, Switzerland and Germany, have a net worth ranging from $90 million to $2.5 billion and on average give away around 5 per cent of this each year. But, said one, ‘more people would get involved if they knew how to do it.’

One common problem for novice donors is guidance on how to structure their giving. The respondents also wanted tangible results for their money and many expressed frustration at the lack of feedback from charities and were wary about general funding for large charities. The study also highlighted the desire for more opportunities for networking with like-minded donors.

The research also found significant differences between the three countries. UK-based families are more likely to give to international causes, such as climate change, poverty and terrorism, while German-speaking families (based in Germany, Switzerland and Austria) usually confine their giving to their areas of residence or business. Perhaps the most striking difference was the reluctance of German philanthropists to talk about their giving – 89 per cent of those approached to take part in the research refused, compared to almost complete cooperation in the UK.

The research was carried out by wealth management consultancy Scorpio Partnership and commissioned by three organizations that advise donors: New Philanthropy Capital in the UK, wise in Switzerland, and the Bertelsmann Foundation in Germany.

For more information
To download the full report, go to www.philanthropycapital.org