Size of the prize
If we want to grow philanthropy in the UK then it stands to reason that we need to understand how much is currently given as a starting point.
Understanding and sizing up the philanthropic market is also essential for strengthening the impact of charitable giving and promoting an informed discussion about philanthropy.
Yet, we currently have only a patchy view. This is partly because there is no formal definition of “philanthropy”. Also, the various surveys and data sources that consider giving trends measure different parts of the landscape, using different methodologies and definitions.
This means we are currently only able to provide an estimate for the amount of money given philanthropically. That estimate is currently around £20 billion – £30 billion that is given annually across individual giving, high-net-worth giving and foundation giving, or roughly 1% of the UK’s GDP. We believe it is possible that with the right conditions and support for donors on their giving journeys, this amount can be doubled.
Why we need better data on philanthropy
The lack of robust data on philanthropy has several consequences for the non-profit sector and for society at large.
If we don’t know how much philanthropy is taking place in society today, it means the role of philanthropy feels of little importance and significance to all of us.
Plus, we can’t improve what we can’t measure. If we don’t understand how much is given philanthropically, it weakens the ability of non-profits to increase philanthropy in the future and engage with policy-makers to create the best conditions for more philanthropic giving.
Finally, lack of the data, especially among the wealthy, fuels media narratives that portray wealthy individuals as failing to contribute sufficiently to wider society. This negative context is likely to discourage those who do give generously and put off those who might consider giving more.
Importance of understanding high-net-worth giving
To get greater clarity on the amount of philanthropy happening in the UK, it is crucial we improve our understanding of giving by high-net-worth individuals. Also known as HNWs, these are individuals with more than £1 million held in cash and investments.
This group is typically under-represented in research using survey methodologies because they are a very small percentage of the population. As a group, they are also difficult to identify in economic data that uses income as the reference point. This is because their financial security gives them options about employment, so they may have low or no income.
These factors mean that current research on giving trends almost certainly underestimates the amount given by the wealthy in the UK.
£7.76 billion identified in HNW and UHNW giving in 2023
In 2023, Beacon partnered with Savanta and Cathy Pharoah, Visiting Professor of Charity Funding at Bayes Business School in 2023, to pursue a plan to address these issues by analysing targeted research among HNWs and ultra-HNWs (UHNWs), who were identified as those with over £30 million held in cash and investments.
Our first report estimating the amount of HNW and UHNW giving was released in October 2023. This report demonstrated that the size of giving by the wealthy is substantially larger than previously thought. We estimate that giving by the HNW and UHNW population in the UK could be worth around £7.76 billion, and possibly much more.
The research was supported by a Working Group of academics and data experts and includes a number of recommendations for advancing our understanding of philanthropic giving in the UK.
Going forward, we plan to continue our partnership with Savanta and Professor Pharaoh at Bayes Business School to develop this research further.
Our goal is to capture more accurate, comprehensive and insightful data on philanthropic giving in the UK going forward that addresses all levels of wealth. Doing so will enable better strategic planning, more effective advocacy, greater recognition of the critical role philanthropy plays in society – and, most importantly, spur the growth of UK philanthropy towards public causes that matter to all of us.
Scoping the high net worth philanthropy market
Author(s)
Cathy Pharoah, Cath Dovey, Tom McKenzie, Vivek Thaker
Year