GlobalData Plc

HNW philanthropists should adopt a corporate mind-set

Many HNW individuals allocate a portion of their wealth to helping others, because they are passionate about giving back to their communities. By adopting a strategic game plan, HNW individuals can ensure their contributions reach full potential.

The 2014 U.S. Trust study found that 98.4% of US HNW households contributed to philanthropy, with education, basic needs, and the arts cited as the most common areas for giving. However, just 3.3% have established a mission statement for their giving. More surprising is that while most HNW individuals are aware of tools such as mission-related investing and social impact bonds, many do not leverage these to advance their goals.

HNW individuals, especially those in the US, express strong demand for philanthropy. They consider philanthropic ventures an important approach to making a difference on a local and national level. From donations to fundraising projects and even volunteering time, developing a strategic plan can help millionaires focus efforts on treating issues at the root.

Developing a philanthropic framework helps visualize goals and measure the impact of philanthropic work. As reported in The Wall Street Journal, many corporations are exploring this approach because it helps build community trust and create awareness among clients who hold similar values. Take for example Wells Fargo, a company which outlines its strategies and priorities through its Vision and Values proposition.

HNW individuals who adopt a similar game plan for their philanthropic initiatives will establish a foundation for identifying the best approach to helping their community. They care about giving back to society, and as such, wealth managers will do well to identify and tap into this population. Wealth managers can help clients build wealth through investment tools, as well as provide advice on philanthropic activities. Leveraging their contacts and relationships, they can also foster partnership opportunities between HNW clients and corporations whose visions align.

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