Here’s how South Africa’s rich are giving their money away

Nedbank Private Wealth has published its Giving Report for 2019, detailing the giving behaviour of high-net-worth individuals (HNWIs) in South Africa.

Nedbank estimates that in 2018, HNWIs donated roughly R6.1 billion in cash (2015: R4.2 billion), R3.1 billion in goods and services (2015: R2.8 billion) and 4.3 million hours of their time (2015: 3.6 million hours).

To qualify as a HNWI one must earn at least R1.5 million per annum or own investable assets of over R5 million, excluding primary residence.

The report shows that the effects of the sustained tough global economic climate have trickled down and are being felt by all.

The total percentage of affluent South Africans who consistently engage in philanthropy has gradually declined over the eight years during which The Giving Report has been published.

While the proportion of HNWIs giving money, time or goods in 2018 remained high, there is a declining trend: 83% in 2018, down from 88% in 2015, 91% in 2012 and 94% in 2010.

On the positive side, while the total number of givers has declined, those who did give were giving more, Nedbank said.

This means the total value of the philanthropic efforts of donors has increased consistently over the past few years. This, coupled with the demographic expansion of the giving base, will prove very important in tackling the social challenges in our country going forward, Nedbank said.

“As South Africa’s economic difficulties continue, the strain on the country’s non-profit sector will almost certainly intensify, meaning that the sector will depend even more on the generosity and collaboration of all donors,” said Iolanda Ruggiero, managing executive of Nedbank Wealth.

“Our non-profit organisations (NPOs) fulfil an important and invaluable role in our society, so it is vital for donors to work even more closely with each other to coordinate their efforts and compound the positive impact of their giving.”

Post-donation expectations, strategy and purpose

Social and community development and religious institutions were the most commonly supported causes, while the proportion of HNWI givers measuring whether their giving had achieved the intended results has risen consistently since the first survey, with 36% having reported doing so in 2018 compared with only 22% in 2010.

The report showed that over half of givers did not expect any followup after making their contributions.

Those who did anticipate some form of recognition most commonly expected a thank-you letter or a receipt.

More respondents were looking for opportunities to become involved with their recipients in other ways (such as visiting the organisation).

A third of givers had a budget and a strategy for giving. Larger givers were more likely to follow a more formalised approach to giving, Nedbank said.

“Most givers (63%) provided general support to their beneficiaries and the relationships were predominantly long term. Just over half of givers supported most of their beneficiaries for more than five years, while 21% had been supporting them for their entire lives.”

Read: This is how much money you need to be part of South Africa’s richest 1%