Wealthy philanthropists are ambitious and want to see changes in government policies soon after they have made a donation, but their efforts are still too fragmented and often fail to have a great impact, a new study has found.
Entitled Alleviating Global Poverty: Catalysts of Change, the research by Forbes Insights was based on a survey of more than 300 wealthy individuals, with investible assets of at least $1 million.
It found that 73 per cent of respondents said they want to affect international and national government policies in a short time.
Interestingly, while 48 per cent admitted there were too many overlapping charities working in the same sector, only 20 per cent said they partner with experts in the field to realise their philanthropic goals.
‘There are two crushing weaknesses with the philanthropic model today,’ said Harvard Business School professor Michael Porter in the report. ‘There is not enough money to give away. And there is too much fragmentation and not enough large-scale impact. That is why we haven’t gotten a lot of great results yet.’
The study also found that philanthropists from different regions of the world disagreed on the main causes of poverty. North and South Americans, in fact, pointed to the lack of access to education, while Europeans focused on the lack of access to healthcare and respondents from Asia-Pacific emphasised on the scarcity of food and shelter.
Local, not global
According to the report, local causes were a priority among philanthropists, with a third of respondents saying only 10 per cent of their donations go on global causes. This was because they felt a need to give back to their own community and because they understood the local context better, but also because they thought local giving often makes an immediate difference.
This is similar to what Simon Thurley, the CEO of English Heritage, has been recently campaigning for in the UK, as he told Spear’s. He called for the country’s wealthy to financially support many of the national historic buildings that will not receive any government funding for repairs and enhancement works, as part of the austerity measures.
However, the wealthiest respondents had a strong focus on global giving, which normally requires more resources. Forty per cent of those with a net worth of at least $50 million said they focused on such issues. Think of Bill Gates, who set up the Bill and Melinda Gates Foundation to eradicate malaria and polio worldwide.
Children’s education was the respondents’ preferred cause, chosen by 38 per cent, followed by children’s health (37 per cent), nutrition and food supply (33 per cent) and pre-school education (31 per cent). However, a third of philanthropists said family planning and contraception should be the top priority in the next five years, while 31 per cent chose the sustainable management of resources such as water and land.
When they have to choose what programmes to fund on, 45 per cent said they looked at the idea or at the premise of the initiative, while 23 per cent said they paid particular attention to the organisation behind the project. Interestingly, only 32 per cent cited the leader in charge of the programme as the most important factor – the report suggested that this was because wealthy individuals often have the ability to influence the choice of leader.
As for the future, nearly one in five philanthropists plans to give away more than half of their wealth. Thirty-one per cent of those with more than $10 million in assets and 46 per cent of those with more than $50 million plan to do so. They will join the likes of billionaires such as Gates, Warren Buffett, Richard Branson, Michael Bloomberg and Azim Premji, who signed up for the Giving Pledge initiative, committing at least half of their wealth to charity organisation after their death.