While high-net-worth (HNW) individuals and companies are among the most prolific givers in the country, there is a significant difference in the giving priorities of these two distinct groups, both of which appear to have taken to heart the popular maxim, ‘We make a living by what we get, but we make a life by what we give’.
According to Nedbank Private Wealth’s Giving Report II, which reveals the recent giving habits of HNW individuals, their main focus is on social and community development causes and programmes, because they genuinely want to improve the lives of less fortunate South Africans. This differs from the main corporate giving focus, which is education.
Twenty-seven percent of the giving from HNW individuals – those earning more than R1,5 million a year or with investible assets of at least R5 million (excluding their primary residence) – focuses on social and community development causes, while research shows that corporates allocate more than 40% of their giving or corporate social investment budgets to education.
The reality is that, in a developing country such as South Africa, the needs and extent of the social challenges are different from those of a developed country
Wealthy South Africans support education, but the Giving Report II shows that, at 11% of total giving, it ranks only third behind social and community development causes (27%) and religious institutions and causes (20%).
Perhaps this difference between HNW individual and corporate giving is understandable, as companies are increasingly aligning their social responsibility activities with the core objectives of the business, trying to improve the quality of tomorrow’s workforce and creating future markets through their strong focus on education, while individual giving speaks to the heart and is values-driven. This is echoed by the increase in religious beliefs as a motivator for HNW individual giving, up from 19% in 2010 to 37% in 2012.
An international comparison is just as revealing. While South Africa’s wealthy focused strongly on social and community development causes, with 67% of them giving to these areas in 2012, around 59% of their peers in the UK gave to medical research as their priority, followed by hospitals and hospices.
The reality is that, in a developing country such as South Africa, the needs and extent of the social challenges are different from those of a developed country. Social and community development needs are much greater and more urgent here and it appears that HNW individuals are prioritising these needs, while still being actively involved in many other areas of giving.
Yet another significant fact to emerge from the Giving Report II is that most giving by HNW individuals is local – focusing on their province of residence. Corporate giving, on the other hand, can take on a more national focus, because companies may be represented in several or all provinces.
South Africa needs HNW individuals and corporates to maintain and even extend their giving and thus make further inroads into the imbalances that exist throughout the country and within the economy.
