UK millionaires respond to cost-of-living crisis with major increases in giving

The UK’s wealthy population responded to the cost-of-living crisis with a sizeable lift in major giving in the first quarter of this year, early indicators suggest.

One in three millionaires made a charitable gift over £10,000 in the first three months of 2023, according to Beacon’s quarterly survey of giving by the wealthy.

The research shows half of the respondents with wealth of £5 million to £10 million and two-thirds of those with wealth of more than £10 million gave more than £10,000.

There were also a significant number of six-figure gifts from millionaires in the £2 million to £5 million wealth band. The largest gift captured in the survey data was £550,000.

Women and younger donors leading the way

Women donors led the way with 40% making a gift of more than £10,000, compared with 27% of men. Younger donors were also particularly active.

Among the under 35s, there was growth in giving at the £1,000, £5,000 and £10,000 thresholds.

The biggest spike was in direct cash gifts and respondents were more responsive to the needs of charities overall giving in 2.3 different ways, compared to 2.0 last quarter.

Biggest increase in giving recorded so far

The research, conducted by Savanta, captures trends among a representative sample of UK millionaires.

This is the 12^th wave of quarterly data on high-net-worth giving and the first time we have seen such a major increase in giving activity.

The median level of giving increase to £3,500 this quarter, compared to £575 last quarter.

The median figure is a measure of what is happening across the whole high-net-worth population (see Figure 1).

The average (mean) level of giving jumped to £20,000, up from £5,000 last quarter. The average typically reflects major gift activity and was buoyed by a spike in major donations from January to March which raised the average overall (see Figure 2).

 

 

Wealthy have dug deeper as crisis hits

Other studies, have shown declining levels of giving through the cost-of-living crisis, highlighting the squeeze on incomes across the population – including among high-income earners who lack a financial cushion.

Only those with higher asset levels have been in a position to increase their charitable gifts.

It highlights that the UK’s wealthy population responds when times are tough and other sources of income dry up for the charity sector.

Seeing this increase across many sections of the wealthy population, including younger wealth holders and those with lower asset levels, suggests many have reached into savings to make these bigger gifts.

Nurture relationships to ensure giving levels can be sustained

It raises the question whether these higher levels of giving will be sustained. Through previous crises we have seen different segments of the wealthy population respond at different times to emergency situations.

For fundraisers, the findings highlight that the very wealthiest donors are willing to support the charities they care about through these difficult times.

This is the time to keep open lines of communication across your relationships to ensure donors know when their support is needed most. 

Donors and philanthropists may wish to consider how they can ensure their giving is sustainable.

Big gifts enable charities to plan ahead, however there may be a requirement for additional or continued funding if inflationary pressures continue to increase social needs at the same that the costs of service delivery are increasing.

It would be well worth checking back with the organisations that you have been funding to find out if additional gifts are needed through the year.

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New data shows philanthropy is growing in the UK