Early spike in millionaire giving drops off while women donors give more — latest data shows 

The major spike in giving by UK millionaires, seen at the beginning of 2023, dropped off in the second quarter of this year, latest data shows.

However levels of giving are still higher than at the end of 2022, according to Beacon’s quarterly giving survey of UK millionaires.

The median level of giving in the last three months (April-June) was £1,000 – compared to £3,500 in the first three months of the year. 

However £1,000 is still double the median level of giving in Quarter 4 of 2022 which was £575.

Similarly, the mean, or average, gift in Quarter 2 was worth £8,171 compared to the mean of £20,000 in Quarter 1.

However this still exceeds the mean of £5,000 at the end of 2022.

The large spike in giving at the beginning of 2023 was fulled by millionaires responding to the cost of living crisis with many charities facing high winter energy and supply costs.

Levels of giving usually increase in response to a current crisis but although the higher level of giving seen at the start of the year has now eased, it is – encouragingly – still higher than last year.

Giving often led by women

Three years ago in June 2020, Beacon launched a quarterly survey of 300-500 high net worth individuals to understand patterns of giving by the wealthy over a continuous amount of time.

The survey, conducted by Savanta, asks wealthy people how much they have given to charitable causes in the previous three months, and whether this was more or less than planned. 

Over three years, the research has shown the ebb and flow of giving in different sections of the wealthy population. 

Looking at all the data so far, the numbers show that giving is often led by women. 

In the wider wealthy population, women give roughly twice as much as men, as more wealthy women give larger gifts. 

Among the most generous 10% the gap between men and women narrows, but gifts by women are still generally larger and women are often among the first to give when needs are identified. 

These findings are evidenced by the median, which has averaged £1,103 for women over the last three years, compared to £490 for men. 

The mean, which provides a better indicator of major gifts, was £7,575 for women over the same period and £7,000 for men.

 

Better recognition needed for women donors

Women are not often identified as major donors, indeed, the Sunday Times Giving List includes only 9 individual women among the list of 100 major givers and 20 women who give as half of a couple or as part of a family.

However, our analysis suggests that fundraising organisations should not underestimate the role women play in giving and influencing major gift decisions. 

Recognising that women donors are a distinct segment of the giving population is an important step to ensuring they are fully engaged. 

For example, targeting fundraising events specifically at women, or bringing women together at events or in a donor circle, acknowledges the important role they play in making major gifts. 

More widely, the UK’s philanthropy sector could do more to celebrate the role of female philanthropy and to understand more about how women make decisions about giving, and how distinct this is from men. 

Certainly, women are distinctly less visible in the giving landscape than their male counterparts. 

Our research suggests it is time this changed.

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Where next?

More articles on high net worth giving data.

 

Seven cycles of pulse surveying among high-net-worth individuals in the UK, from the height of the pandemic until now, suggest regular giving is increasing among those with higher levels of investable wealth. The results also highlight the need for improved monitoring of giving patterns among the asset rich if we want to sustain growth momentum.

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Our latest quarterly survey results – covering the period September to December 2021 –  show the effects of the pandemic are receding on giving patterns, revealing underlying trends in recent UK philanthropy.

The run-up to Christmas 2021 saw an uptick in the number of big gifts by wealthy individuals. With an increase in the average level of giving in all wealth bands, the results suggest growth in seasonal giving was closer to pre-pandemic levels.

The average level of giving jumped to £6,400 in the three months to December, with more than 25% saying they gave more than they had planned.

The median level of giving has also continued on a steady upward trend, reaching £400. The last time the median was at this level was in September 2020 as the pandemic peaked in the UK.

These results come from the Beacon Collaborative’s quarterly pulse survey of high-net-worth giving trends, conducted in partnership with Savanta. The December results are based on survey responses from 514 high-net-worth individuals in the UK[1].

^{Figure 1: Median level of giving by HNW individuals from June 2020 to December 2021.}

^{Figure 2: Mean level of giving by HNW individuals from June 2020 to December 2021.}

Growing evidence that more wealthy people are starting to give more, more often

While sporadic big gifts are a consistent feature in philanthropy, and are actively sought by most philanthropy fundraisers, it is the gentle increase in the median giving level that offers significant potential. Since June 2020, the survey results suggest compound quarterly growth of around 12% in the median level of giving, from £200 to £400.

^{Figure 3: Median level of giving by all HNW individuals from June 2020 to December 2021.}

While the quarterly level of giving is still proportionately low in the high-net-worth population, at £400 in December 2021, the median trend suggests more wealthy people have been giving more often at higher levels each quarter since June 2020. This bodes well for engaging more wealthy individuals on their philanthropic journey.

Propensity to give is linked to asset levels (not income)

We began this quarterly analysis at the start of the Covid crisis in order to open a window on the giving trends among high-net-worth donors.

Over this period, a number of distinct patterns are emerging, most notably that those with higher asset-levels do give more – not a lot more, but there is a higher propensity to give major gifts and larger regular gifts.

The consistent upward trend in the median giving level is also noteworthy, particularly as recent analysis from Pro Bono Economics has shown giving levels decreased among top earners between 2011 and 2019.

Mind the Giving Gap uses HMRC income and tax data and determines that those with a median income in the top 1% of earners saw their earnings rise from £247,000 to £271,000 during this period. During the same period, their typical donation fell 20% to £48 per month.

The detailed analysis contained within the report underscores multiple worrying trends that have characterised British giving across the wider population since the financial crisis of 2008, resulting in lower participation rates and lower levels of giving. It also makes a number of valuable suggestions for changing the dynamics of philanthropy in the UK.

The analysis by Pro Bono Economics is thorough and comprehensive, but it is important to note that the conclusions on high-net-worth giving rely on income data and donations reported in self-assessment forms. This represents only a segment of the wealthy population.

The high-earner category includes a sizeable population in the UK that is typically referred to as “cash-rich and asset-poor” by the wealth management community. This means they have high incomes, but their income funds their daily life expenditure and they do not have the extensive savings and investments that provide financial security.

As we can see in Figure 1 and Figure 2, those with lower asset levels typically display a lower median giving level and give fewer large gifts. Among the asset-rich, the dynamics are more positive.

Pro Bono Economics’ analysis will miss significant segments of UK’s asset-rich population, such as those on low or moderate incomes who draw down from investments what is needed for their daily life needs.

Our analysis suggests that an increasing number of individuals in this population are giving more, more regularly. If we want to encourage this trend, then it is imperative that we encourage philanthropy to be seen as a normal part of a “wealthy lifestyle” in the UK, so that income is drawn down to cover their annual gifting goals.

It will also have captured only a proportion of amounts given by wealthy individuals from giving structures, such as donor-advised funds or philanthropic family trusts. These vehicles typically receive infrequent large lump sums that are then gifted out over a period of time.

Key lessons from emerging data on high-net-worth giving patterns

There are a number of key lessons we can draw from these two separate analyses.

1. Firstly, understanding how much is given philanthropically, and by whom, is a complex challenge requiring multiple data sets that are not easily available.
2. Secondly, if the asset-rich population shows the highest propensity to give in larger amounts, this population merits greater study for their philanthropic activity.
3. Thirdly, regular high-net-worth giving, measured by the median, should be monitored as a significant indicator of philanthropic growth. This indicator is more helpful to understand what is happening in the wider wealthy population than tracking one-off big gifts or monitoring the mean (average), which fluctuates significantly in response to sporadic major gifts made by a tiny fraction of any sample group.

If we want to understand the contribution to civil society of the wealthy population, we need to understand how median giving varies across different wealth bands, measured according to their investable assets.

It is only with this insight, measured consistently over time, that the fundraising community and the philanthropic sector will be able to establish and monitor the success of their growth strategies among those with the potential to become significant long-term supporters.

Until we have a baseline, we simply will not be able to assess “what works?” when it comes to growing UK philanthropy.

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[1] Given the size of the UK wealthy population the confidence interval in the data is 4%, with a 95% confidence level. This means we can have a good level of confidence that the median figure is accurately within a tight range around £400. Sample sizes for previous quarters have varied from 303 – 514 individuals.

A note on the median and mean

* The median provides an indicator for what is happening to giving across the whole of the wealthy population. The median refers to the exact midpoint of the dataset, with half of respondents giving above this level and half below. 

** The mean is sensitive to levels of giving among the most generous in the wealthy population. This is the average as calculated by adding all datapoints together and dividing by the number of datapoints in the set. It can easily be skewed by a small number of very high-level donors.

What is the threshold for generosity in the UK today?

When you start on your giving journey, one of the hardest questions to answer is: “how much is generous?”

Giving is so personal, and traditionally so private, that there are not really any benchmarks for generosity. Talk to friends and neighbours and you may discover you are doing more than most. Look in the media and you will find so many examples of big philanthropy that you might start to wonder if you are generous at all. 

The lack of a shared understanding of what it might mean to be generous in a UK context has resulted in levels of giving that vary hugely among wealthy people – by which we mean from a few hundred pounds to several million. Naturally, everyone feels their own level of giving is generous. 

This may be good for the conscience, but is it helpful?

 

Would it be helpful to have shared understanding of generosity?

In practical terms, an agreed understanding of what it means to be generous might have some real benefits. 

Let’s start with the organisations that are receiving gifts from wealthy individuals. When you give, let’s say, £5,000 to a charity you care about, it might feel like a lot of money to you. Of course, it is in absolute terms. Yet a gift of this size might only keep a very small charity running for a few weeks or months. In a large charity, it will be barely more than a rounding error. 

This can lead to a mismatch of expectations. Thinly-resourced charities don’t have much time to follow up with donors at the best of times and a donation of this size might not even result in a thank you note. That is not a great feeling for you. It might even seem like bad manners under the circumstances and it is certainly no way to start on a giving journey. 

There is a similar problem if you want to get advice or support to make sure your gift does as much good as possible. Gifts at the £5,000 level are not generally big enough to merit much quality time. 

An objective measure of what generous giving looks like would be helpful all round to setting and managing expectations to make sure your giving journey gets off on the right foot.

 

Why does generosity vary so much among the wealthy?

Over the last couple of years we have been working on various data sets to try to answer the question: how much is generous for the UK’s wealthy?

It has not been easy, partly because we have to work with those significant fluctuations of giving within wealth bands. Partly also because, on average, those who are affluent give more as a proportion of their assets than those who are wealthy or very wealthy, which means the only way to construct a generosity threshold is on a continuum for different wealth bands. There is no one-size-fits-all when it comes to generosity. 

This giving continuum happens for two reasons. Firstly, people give from their income. Wealthy people may have a lot of money invested, but they will typically only draw down the money they need to cover their lifestyle costs. For most wealthy people, this means they have much more tied up in investments than they have in their bank account and consequently the amount they give may be a high portion of their income, but will be a much smaller proportion of their overall assets.

Secondly, people generally think in absolute terms and not in percentages. So, when an individual considers giving £1,000 it sounds like a reasonable amount, but when someone considers giving £100,000 it sounds like a lot. It doesn’t matter if the person has £100,000 or £10 million in the bank and these gifts would represent 1% of assets respectively, the larger number has a perceived higher risk. This is due to an effect called ratio bias and it means people have a tendency to attribute a bigger risk or reward to a bigger absolute number, even if the ratio is the same.

 

Is it possible to develop an objective standard for generosity?

Yet, in spite of these challenges – or more accurately because these biases and behaviours are so commonplace among people – it is possible to construct a model showing what it means to be generous for each wealth band. 

Expressing the values both as a percentage of wealth and in absolute terms, the model shows that someone with between £250,000 and £1 million of investable assets should consider a gift of 1% of assets to be generous. Depending on the level of wealth, this will equate to between £2,500 and £10,000 of giving each year. 

For those with investable assets between £1 million and £5 million, the percentage is 1.1%, or between £11,000 and £55,000. 

Someone with between £5 million and £10 million of assets should aim to give 1.2% of their assets each year, or between £60,000 and £120,000, and so on. 

Wealth level (£)	Generosity threshold % of assets given to be considered generous	Amount of annual giving (£)
£100,000	0.9%	£900
£250,000	1.0%	£2,500
£500,000	1.0%	£5,000
£1,000,000	1.1%	£11,000
£5,000,000	1.2%	£60,000
£10,000,000	1.2%	£120,000
£100,000,000	1.4%	£1,400,000
£1,000,000,000	1.7%	£17,000,000
£10,000,000,000	2.0%	£200,000,000

^{Figure 1: The UK’s Generosity Threshold – Source: Beacon Collaborative}

The model is based on data from a survey on giving habits that we conducted in 2019 among 1,300 wealthy individuals. We combined this with supplementary data from the Sunday Times Giving List and the Coutts Million Pound Donors Report to ensure we were capturing data from individuals whose giving is known to be generous.

We then used statistical methods to determine objectively what it means to be “generous” at each level of wealth.

 

Why do we need a starting point for generosity?

It is important to note that these values are the threshold for generosity. In other words, this amount is the starting point for what might be considered to be generous. Within each wealth band there will be individuals who give well above this level for family, religious, cultural or other reasons. 

For most wealthy people, however, these thresholds will be a significant stretch from their current levels of giving. In 2019’s survey, the median level of giving among wealthy people was £4,000. This means around half of the UK’s millionaires would have multiply their giving by 4x or even 40x for it to reach the generosity threshold, depending of course on how rich they are. 

We don’t expect this will happen overnight. It will take time for wealthy people to gain confidence, build relationships and access the support they need to move forward on their giving journeys. 

Equally, we don’t want these threshold values to be seen as an expectation or judgement. Giving is a voluntary act and it is important that people are free to give at the levels that are right for their own circumstances, values and beliefs. 

Rather, for those starting on their giving journey, we hope the threshold may become an aspiration. For experienced givers, it may be a benchmark that they long-since have surpassed. 

For the wider philanthropy sector, however, we hope it creates a shared understanding of what serious giving looks like and feels like for individuals in different wealth bands. 

Fundraisers, take note that a £5,000 gift from someone with £500,000 in assets is not to be sneezed at. Wealth advisers should beware that when a client with £5 million considers a gift of £60,000, they will greatly value your support, because this is a big deal relative to their wealth. 

And for the philanthropy sector as a whole, if we can give more wealthy people the confidence to donate at these levels, it will be a measure of our success in enabling meaningful giving journeys. 

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