Philanthropists in the United States are more willing than their peers in other parts of the world to donate at least 25 percent of their annual income and leave at least 50 percent of their fortune to charitable causes, according to the BNP Paribas Individual Philanthropy Index by Forbes Insights.
United States got 18.8 out of the ideal score of 30 in the “current giving” portion of the index, compared with Europe’s 16.3, Asia at 14.3 and the Middle East at 7.4. In the “projected giving” gauge, the US got 11.5 out of the ideal score of 20 while Europe got 9.5, Asia 8.3 and the Middle East 5.1.
“We’re quite surprised as we thought the figure for the US should be miles ahead of other countries, but it turns out it wasn’t,” Kasia Moreno, Forbes Insights report author, told a press briefing Wednesday.
“Current giving” measures one’s willingness to donate at least 25 percent of their annual income to charitable causes while “projected giving” refers to leaving at least 50 percent of their fortune to charity.
The index was derived from a survey of 414 unnamed individuals from the United States, Europe, Asia and the Middle East with at least US$5 million in investable assets, conducted by Forbes Insights between October and December last year. According to Forbes, 80 percent of the individuals from Asia were from mainland China and Hong Kong.
“It is important for BNP to set up free philanthropy advice services so as to better understand its clients’ needs,” Mignonne Cheng, chairman and chief executive of wealth management for Asia Pacific. “We have just established this offer — [we are] still in a learning stage — but we intend to move faster [in the coming years].”
Cheng said BNP Paribas has been seeing an upward trend in philanthropic activities among high-net-worth individuals in the past years. The group also noticed that the older generation prefers passing on family values while the younger ones want to get involved more, she said.
“Besides setting up trust funds, they will also invest in social enterprises, hoping to teach people how to fish instead of just giving people fish,” said Christina Lee, managing director and head of philanthropy services in Asia Pacific.
Most philanthropists prefer helping their hometown first, which is particularly true in Hong Kong where the rich people start with local charities and then become increasingly involved in charitable projects on the mainland, such as those concerning health and education, Lee said.
For philanthropists looking for more involvement in charitable projects, the major concerns are governance, that is, seeing to it that the money goes to the target beneficiaries, and the administration fees involved. BNP helps clients in this respect by setting up trusts for their charitable causes, Lee said.
Most of the respondents in this year’s survey named the environment as the cause most urgently in need of philanthropy in the world. In Asia, Europe and the Middle East, it’s the number one cause, but in the United States, health is the most important issue, followed by hunger and food, which is also the second most urgent issue in Asia and Europe.
More than 60 percent of the respondents from the US and the Middle East think that their country is urgently in need of philanthropy while only 40 percent think so in Asia and Europe.
This is mainly attributed to the prevalence of a religious orientation in the US and the Middle East, while a tendency towards saving money dominates Asia and Europe, Moreno said.
“This can be illustrated by another question addressed to them: ‘What motivates your philanthropy?’ In the US and Middle East, religious faith ranks second, but it only ranks fifth in Asia while it is not on the top five for Europe,” he said.
As of end-December 2013, BNP’s wealth management unit had 280 billion euros (US$384 billion) of assets under management globally, of which more than US$50 billion came from Asia. The unit also saw 12 billion euros globally in total net new money last year with Asia contributing a very large part of it, Moreno said.
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