An international report into $1 million (USD) charitable donations has revealed stark differences, as well as similarities in the causes that donors favour when making large donations.
The sixth edition of the Million Dollar Donors Report has this year expanded to include new territories including China, Hong Kong, Russia and the Middle East alongside data from the USA and the UK. The inclusion of data for Russia in the report is particularly pleasing for Charities Aid Foundation (CAF) as CAF Russia, part of the CAf Global Alliance, provided the research, data and analysis for the report on $1 million donations in Russia
Published by Coutts in association with the Indiana University Lilly Family School of Philanthropy, the report reveals that within the jurisdictions in which data was collected, wealthy donors (and their foundations) gave $19 billion in donations of $1 million or more. In total not-for-profit organisations received 1,955 million dollar donations worth a total of $19 billion from 1,249 donors.
The report rightly warns against direct comparison of the data between countries given that the data is distorted by cultural, political and economic factors – not least the extent to which donors are willing to talk about their donations. This warning is one that should be taken seriously as the availability of data differs from one country to another and will likely have skewed the data heavily. But whilst drawing conclusions from relative size and scale of donations between nations (which incidentally would reveal a handsome lead for the USA) would be problematic, there are other aspects of the data where a comparison is worthwhile.
For instance, it is interesting to note that a large proportion $1 million plus donations in the UK and US went to higher education – 42% and 40% by value respectively.. In contrast, higher education only attracted 22% of Chinese $1 million plus donations, 19% of Middle Eastern donations and just 9% of Russian donations. Also noteworthy is the low levels of $1 million donations to domestically headquartered organisations which operate primarily abroad but high levels of such donations to foreign based not-for-profit organisations. In the UK for example only 3 out of 197 $1 million plus gifts went to international organisations but 39 went to ‘overseas’ charities. Interestingly, 65% of the money donated in $1 million plus donations in the Middle East went to overseas causes.
What stands out from analysing the different causes preferred by those making $1 million plus donations is that their giving habits do not seem to reflect the causes favoured by the average person in their country. In the USA for example, according to Giving USA 2013 only 13% of money donated to US based charities focussed on education compared to the 40% of $1 million plus donations by value that went to higher education. In the UK, according to UK Giving 2012 only 1% of all donations went to Arts, culture and humanities compared with 10% of $1 million plus donations.
Such pronounced difference between the causes favoured by those making very large donations and the average donor might lead some to question the extent to which philanthropy is, as it purports to be, in the public interest. Such concerns highlight the importance of national definitions of what is and isn’t considered charitable activity, particularly in countries where tax incentives are offered on donations. It is a delicate balance. Offer too broad a definition and governments risks conferring benefits for acts of self interest. Narrow the definitions of public benefit too much and donors may start to feel that their giving is being directed by the state.
Ultimately, charitable giving, though often targeted at the collective good, is an expression of individualism. If we believe that charitable funds are better allocated to a certain cause then we must make a compelling case to donors. There is a wealth of information available about high net wealth donors and what drives their giving, such as the reports of CAF’s Future of Philanthropy series, and the evidence suggests that they are becoming more open to innovative approaches and more engaged in scrutinising impact.
Donors as generous as those detailed in the Million Dollar Donors Report 2013 should be role models for society, less for what causes they give to, but more for the fact that they give to causes that they feel strongly about generously. Because to get the Future World Giving we need prominent role models.