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Wealth X: Covid-19 Philanthropy: Spotlight On Major Giving in 2020

What is this Report?

The report focuses on the philanthropic interests and inclinations of Ultra High Net Worth (UHNW) Individuals around the globe with an eye to how COVID-19 and social movements impacted giving.

The report defines UHNW as those with a net worth of $30M+ and are also referred to a sultra-wealthy. Very High Net Worth (VHNW) individuals have a net worth between $5M and $30M.

What are key findings from the article?

  • Ultra-high net worth individuals were responsible for over 20 percent of giving in 2020. This group includes 290,720 individuals worldwide. It’s definitely a case of the 80/20 rule. However, this figure does not include private foundations. Donations from the UHNW class, including their private foundations, represents a substantial 36% share.
  • The number of VHNW and UHNW individuals in a region does not necessarily determine philanthropic giving. Other factors including history of philanthropy, tax structures and incentives, and more also play a factor. The US has a large number of both groups and a developed climate of philanthropy. Other regions of theworld may have similar number of UHNW and VHNW individuals but do not have the same level of giving.
  • The ultra-wealthy gave $7.4 billion to Covid-19 and social justice causes from January to October in 2020, which may even be an underestimate since not all giving is public. Donors to these causes tend to be younger, give more, and connected to technology than the average major Ultra High Net Worth philanthropists. There is a higher percentage of women who give in these categories than the average UHNW philanthropists. There is a perception that wealthy individuals have risen to the challenge of COVID-19.
  • Both organizations and major gift prospects have adapted to the world of digital connections fairly quickly. Video-conferencing has been effective. Some gift officers note that it is easier to find people since most are now at home due to the shutdowns. But Wealth-X thinks that the full impact of digital connecting compared to face-to-face meetings in person is not known and that data from 2021 will give a more complete picture
  • Other changes in 2020 include: the increased importance of giving, openness to unrestricted funding, and more collaboration. The pandemic has exposed economic disparities and people have been responding. Unrestricting giving allows nonprofits to apply the giving to where it is most needed – likely salaries and other operating costs. Donors are coming together to give to causes.

What can I do as a result?

  • While UHNW individuals and foundations gave a lot to nonprofits in 2020, do not forget that $304 billion was given by non-UHNW individuals. While this figure does include VHNW individuals, there are many people who give but are not in these upper echelon categories. As the virus has taught nonprofits, diversifying giving is a must.
  • Be aware that collaborative giving with UHNW and VHNW individuals maybe come more common. Including the spouse (don’t forget the women) and possibly the entire family may critical to securing gifts. Giving circles are becoming more popular forms of giving; leveraging one’s networks is becoming even more important.
  • While Wealth-X thinks the jury is still out, cultivating in a digital format has been working. It’s critical to keep in contact with your donors, anyway that you can that is beneficial to everyone involved. For example, small online events can create a way for top donors to have an intimate relationship with your mission and program staff. Digital expands access while demanding less time from your top donors.
  • The UHNW philanthropic landscape is changing and you have to be prepared to approach different segments of UHNW individuals differently. We are seeing how the demographics of UHNW who give to COVID-19 and social justices are different from the average UHNW. These trends are likely to continue to change as new generations become a larger percentage of the UHNW pool.

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