The latest Nedbank Private Wealth Giving Report shows that 83% of South Africa’s high-net-worth individuals (HNWIs) showed up to make a difference in 2021, by giving of their time, money, goods and services to worthy causes – despite the Covid-19 pandemic.
Published last week, the fifth edition of the report estimates that the country’s rich donated R4.2 billion in cash, R2.6 billion worth of goods and services, and 3.2 million hours of their time to support mainly social and community-development causes, religious institutions and Covid-19 related efforts.
To gain insights into the country’s wealthy population, a sample of 409 HNWIs was surveyed in 2021, to draw inferences about the estimated 147 836 HNWIs in the country.
Criteria to participate in the survey include that individuals must earn at least R1.5 million annually or have a net worth of at least R5 million.
In 2021, 59% of respondents earned between R1.5 million and R5 million annually – 6% more than recorded in the fourth edition of the Giving Report in 2018.
Around 70% of respondents in the latest survey have a net worth of between R5 million and R10 million.
The first edition of the report was published in 2010. Researchers compiling it have thus collected 12 years’ worth of research into the philanthropic practices of South Africa’s wealthy.
Of note is that the researchers are now able to assess how the advent of the Covid-19 pandemic has impacted the giving practices of wealthy individuals.
According to the latest report, although the population of HNWI givers is estimated to have increased by over 12 000 since 2018, the cash value of donations made by wealthy South Africans decreased by about R2 billion.
The Giving Report also notes that most cash donations (56%) were under R10 000, with the number of donations in this bracket up from 39% in 2018. Cash donations above R50 000 decreased from 22% in 2018 to 15% in 2021.
Nedbank Private Wealth managing executive Marilize Lansdell comments: “This decline in giving value is understandable, given the severe economic impacts of Covid-19 and the numerous other social and natural disasters that have beset the country in the past year.”
She adds: “Covid-19 has also had an impact on the support provided to the various philanthropic sectors, with most of these experiencing a decline in giving value, [while] average giving to the social and community development sector increased, with 6% of funding redirected towards pandemic-related causes.”
Lansdell, however, says that in a post-pandemic environment, the picture is expected to change, with most households and businesses expected to recover.
The pandemic is also believed to have played a role in the reduced amount of time that HNWIs spent volunteering. In 2021, only 43% of givers volunteered their time to a cause, down from more than half of givers in 2018.
Furthermore, in 2021 most givers volunteered fewer than 50 hours of their time in a year, which equates to less than an hour per week.
Finding the balance
Considering the impact the pandemic had on the value of cash donations, Hein Klee, head of international at Nedbank Private Wealth South Africa, says the entity is now interested in extracting greater value from givers – be it in terms of time, service, or monetary donations.
“The important thing is how do we encourage people to give more? The R6.8 billion we refer to in cash and goods is a drop in the ocean … [so] how do we get to R80 billion or R100 billion?”
The study indicated that economic climate is a big driver, Klee notes.
“The human nature of wanting to do good I think will always be there, but it is always difficult to quantify that in a rand amount.
“I think the important part here, is if we are potentially seeing a static level of cash being given – how do we promote people to give more hours, more goods and services?
“So, I think it will be about finding that right balance that one specifically needs to look at from a future perspective,” says Klee.
Effecting tangible change
Klee says Nedbank Private Wealth is looking at ways it can streamline the philanthropic efforts of its HNWI clients to drive greater social impact.
The bank believes the giving is too fragmented. While the R4.2 billion cash amount is significant, it will thus have only small impacts.
“So, what we are driving towards is to say, we’ve got a whole lot of sectors that people are supporting.
“Let’s rather group the sectors, bring them up to client level and say – we’ve got 10 clients that are specifically focused on junior education. Let’s bring the 10 of them together and make an impact on a specific project,” he explains.
Brought to you by Nedbank Private Wealth.
Moneyweb does not endorse any product or service being advertised in sponsored articles on our platform.