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Downes Murray International News

Despite economic challenges, philanthropy is still prominent among high net worth individuals

According to the findings of the 2015 Giving Report (The Giving Report III), produced by the Philanthropy Office of Nedbank Private Wealth, 88% of South Africa’s high net worth individuals (HNWIs) gave of their time, money services or goods to uplift the less privileged, or in support of causes close to their hearts.

Based on independent research commissioned by Nedbank Private Wealth and conducted with a sample of 400 affluent individuals from across South Africa, the report is the third such commentary produced since 2010. For
the purpose of the research, high net worth implies an income of at least R1.5 million per annum or investable income (excluding primary residence) of more than R5 million.

According to Noxolo Hlongwane, Head of Philanthropy at Nedbank Private Wealth, The Giving Report III offers heartening evidence of the continued desire by the country’s wealthier individuals to apply their money, knowledge and skills in the upliftment of those less fortunate.

Of particular interest is the increasing tendency it identifies for HNWIs to get actively involved in causes they support rather than merely donating money. Non-cash donations increased in popularity
to 78% (2015) from 67% (2012).“We continue to see steady growth in the amount of volunteerism and the value of time and personal effort invested by affluent individuals into the causes they support,” says Hlongwane.

As has been the case in previous reports, social and community development remain the top beneficiary category for the country’s affluent, with projects and causes in this sector receiving 69% of the total giving support, and 33% of the total value donated for the year. Non-profit organisations (NPOs) are the most commonly supported beneficiary within this category, with a particular emphasis on organisations working to support and care for orphans, vulnerable children and
the elderly.

According to Hlongwane, religious beliefs also continue to play a big role in people’s propensity to give. “34% of the survey respondents highlighted their religious beliefs as a key motivation behind their philanthropic commitments, and it is interesting to note that those motivated by such religious beliefs also tend to give larger amounts on average.”

Given these motivating factors, it’s perhaps unsurprising that the report findings point to a reluctance by the country’s affluent to align their giving with political agendas of any sort. Advocacy groups and political parties received only 3% of the total value of philanthropic support provided by respondents in 2015. When asked about their confidence in various groups to solve societal problems, about two thirds had little confidence in government as positive change-makers, choosing to place their faith in the country’s large corporates and religious institutions.

Networks

Hlongwane says that personal networks are also a significant beneficiary determinant, with almost half of the respondents pointing to their personal and business networks as a key means by which they identified or selected beneficiaries to support.

For most high net worth givers, philanthropy appears to be driven more by the heart. “Only around 5% of affluent givers use trusts or foundations as vehicles for their philanthropic efforts,” explains Hlongwane, “but those who do approach their giving in a more planned and strategic manner, tend to donate significantly larger amounts on average.”

Hlongwane says that the Giving Report is an invaluable piece of research by
which the work of Nedbank Private Wealth’s Philanthropy Office delivers on its mandate to create strong links between affluent givers and deserving beneficiaries.

“Through the research and publication, we continue to foster discussion and encourage philanthropic action by
applying our expertise to do good,” she adds, “thereby helping our clients to make lasting positive change for the country while creating a legacy of which they can be truly proud.”

The report is available online at https://www.nedbankprivatewealth.co.za/south-africa/the-giving-report-III

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