One of the most interesting sections of the World Wealth Report 2007 covers philanthropy around the globe.

Wealthy individuals are generous
The study found that 11% of high net worth individuals (HNWIs) worldwide contributed to philanthropic causes in 2006, and those who did so allocated more than 7% of their wealth to this end. Ultra high net worth individuals (UHNWIs) gave even more - 17% contributed to philanthropic causes, and gave over 10% of their wealth. The total given came to more than US$285 billion. These figures are even more commendable when compared to the level of giving of less wealthy individuals, which averages 1.5% of earnings each year.

Giving varies by region
The report highlighted geographic differences, with 14% of North American and Asia-Pacific HNWIs (and 26% and 16% of Ultra-HNWIs, respectively) making philanthropic contributions compared with roughly 7% of HNWIs and 10% of UHNWIs in Europe and the Middle East. 3% of HNWIs and UHNWIs in Latin America made philanthropic allocations in their portfolios. There were also noticeable differences by region in the levels of giving within those individuals who contributed.

HNWI Philanthropic Involvement 2006

Modified from Merrill Lynch and Cap Gemini World Wealth Report 2007

Investment-like giving
It makes sense to maximize the benefit delivered by dollars given - in a sense, maximizing the social return on the capital invested. The World Wealth Report claims that:

‘HNW philanthropists are leveraging tactics that are quite similar to those utilized and proven successful in their business ventures and personal investing. This is resulting in a growing trend toward strategic “investment-like” giving aimed at maximizing societal return on investment. HNWIs are also investing significant personal time and energy toward attaining their specific philanthropic goals.’

The report highlights the recent growth in popularity of donor-advised funds - structures that allow individuals to grow a philanthropic investment without taxation and then influence the timing, amount and allocation of distributions from the fund. ‘Donor consulting’ firms have also emerged, advising HNWIs and UHNWIs on philanthropic investments.

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