Wealth advisers have been encouraged to talk about philanthropy with their clients, as while high net worth individuals (HNWI) are increasingly considering giving as part of their investments, it is still viewed with “cynicism” in the UK, according to the Charities Aid Foundation (CAF).

The foundation’s High Value Giving Report, in partnership with Altrata, noted that around 1 per cent of the UK’s population had investable assets of £1m or more, with their combined investable assets totalling £2trn.

According to the report, HNWIs in the UK donated an estimated £7.96bn in 2023, equivalent to 0.4 per cent of their investable assets.

Meanwhile, the rest of the UK population donated around £13.9bn to philanthropic causes, equivalent to approximately 1.6 per cent of their income.

The most generous 10 per cent of HNWIs had an average age of 63, with the majority being male and self-made.

However, women were “significantly” over-represented among the most generous HNWIs, making up 29 per cent, and were more than twice as likely to have inherited their wealth.

The most popular cause donated to among HNWIs and those with more than £30m in investable assets was education, with 56 per cent and 60 per cent donating to this cause respectively.

This was followed by healthcare and medical research (28 per cent and 32 per cent), and arts and culture (both 26 per cent).

The CAF called on advisers to talk about philanthropy with their clients, noting that only 5 per cent of advisers were ‘very confident’ in discussing philanthropy with their clients.

This is despite nearly one in five HNWIs stating they would choose a financial adviser who offered support on making charitable donations, rising to 57 per cent of under-35s.

It argued that meaningful conversations about philanthropy can improve relationships with clients, as 56 per cent of HNWIs felt that giving to charity was an important part of their life.

“HNWIs are increasingly considering their giving as part of a range of investments, targeting long-term social and environmental impact alongside financial goals,” commented CAF head of private clients, Edward Garrett.

“Philanthropic funders can pursue innovative approaches to social and environmental issues and take risks with their funds that others can’t - for instance by funding groundbreaking research or supporting pilot studies.

“Despite its importance and the personal fulfilment it can provide, I often hear from clients that philanthropy can be quite a lonely affair. Giving and personal finances can be sensitive topics for us all, even among family.

“There is also cynicism towards philanthropy in the UK, perhaps more so than other countries like the US, where there is a more active culture of giving by HNWs. To unlock greater funds for charities, we need people to talk about giving more.

“Donors are inspired by hearing about the giving programmes of peers and what they have managed to achieve.

“Wealth advisers also have a critical part to play. They don’t need to be philanthropy experts, but should understand the different approaches available to their clients and know where to turn for expertise.

“As well as helping to win new business, especially with the next generation, it’s also an enjoyable way to build a deeper relationship with clients.

“There is considerable untapped potential for philanthropy in the UK. The health of our civil society is directly tied to charitable giving, so we need to proactively build our British culture of giving to ensure its strength for the future.”

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