While the number of high-net-worth individuals (HNWIs) who donate money, time or goods has remained high, the fourth edition of The Giving Report released by Nedbank Private Wealth shows that the number has been consistently declining since 2010.
In 2010, when Nedbank Private Wealth first launched the report that provides insights into the philanthropic behaviours of South Africa’s affluent, 94% said they gave their money, time or goods to social causes.
In 2018, this number has come down to 83%, in 2015 it was 88% from 91% in 2012.
This gradual decline is unsurprising writes Iolanda Ruggiero, managing executive at Nedbank Wealth.
“The effects of the sustained tough economic climate have trickled down and are being felt by all,” she states.
To qualify as a HNWI you must earn R1.5 million per annum or own investable assets of over R5 million excluding your primary residence.
The fourth edition of The Giving Report conducted interviews with a sample of 430 HNWIs who had to answer 70 questions which looked at the amounts they gave in 2018, what causes they were donating to, and how they came to choose those causes.
While the number of those who donated has been dwindling, the value given by those who remain has increased, with HNWI’s donating R6 billion in cash in 2018 compared to R4.2 billion in the 2015 report.
Those who did not give increased to 17% in 2018 compared to 12% in 2015.
The survey found that the main deterrent to giving was the income levels and net worth, with the most common reason for not giving, from 29% of the respondents, was “not being in a financial position to do so”.
The report states that 64% of these individuals earned between R1.5 million and R2 million per year and 28% had a net worth of less than R5 million.
This is similar to global trends as shown in a recent Barclays Barriers to Giving report looking at the giving or non-giving patterns of a wealthier sample group of 400 people with assets of $6.5 million (over R96 million) or more in nine countries namely UK, France, Germany, Italy, Saudi Arabia, the United Arab Emirates, Hong Kong, Singapore and India.
The study found that 75% of HNWIs believe that supporting philanthropy is “a responsibility of those wealthier than themselves” and “42% believe that making extra donations wouldn’t be enough to have a significant impact”.
Giving, HNWIs and beyond
University of Cape Town (UCT) vice-chancellor Professor Mamokgethi Phakeng was keynote speaker at the launch of The Giving Report and shared her insights on philanthropy.
In 2018, shortly after beginning her term as VC, Phakeng pledged to donate 10% of her salary to help fund black postgraduate students (UCT’s 2018 annual report states that her annualised salary is R3 million).
In addition, she is the founder of the Adopt-a-learner Foundation, a non-profit organisation that gives average students with potential from rural and township schools financial and academic support. The foundation aims to see learners through the completion of their degrees, paying for tuition, learning materials and accommodation, and providing a stipend.
This means that if learners take longer to complete their qualification, the costs increase.
“For us, the measure of success is the completion of the qualification, not that we have given so much,” said Phakeng.
The report comes on the back of the Inequality Trends report launched on November 14 by Statistics South Africa in partnership with the South African Labour and Development Research Unit at UCT.
The report reiterates a known fact that South Africa is considered one of the most unequal countries in the world which is rooted in a history of colonisation and apartheid. Added to that, inequality in the country “appears to be remarkably persistent” despite efforts made in the democratic dispensation.
For instance, income inequality in the country is “exceptionally high”. Since 1993, when there has been nationally representative data, the Gini coefficient of household per capita income has typically been well above 0.6.
The Gini coefficient is the measure of income inequality, ranging from 0 to 1 – with 0 representing a perfectly equal society and a value of 1 representing a perfectly unequal society.
“I look around and I think that if each one of us gave a little bit of what we have, the country will be a little different,” said Phakeng.
She emphasised that the effort to give back should not only be placed on HNWIs, saying it is everyone’s responsibility.
“You don’t give from your excess, you give from what you have and there has got to be a bit of pain,” she said. “It’s not always money, I give of myself, or the goodies that are due to me.”