We explore a report on UHNW philanthropy and consider what this means for the superyacht market…
A new Wealth-X report highlights the scale of UHNW philanthropic activity globally. Against the backdrop of rising global inequality and ever greater financial and ethical expectations on the ultra-wealthy, we consider what the superyacht industry can learn from the level of philanthropic engagement on the part of the world’s wealthiest individuals.
In 2020 the world’s 296,930 UHNWIs donated an estimated total of $175 billion to philanthropic causes, which averages out at $590,000 per UHNWI. By contrast, non-UHNW individuals contributed $312.8b billion and institutions and public foundations $263.9 billion.
“In terms of the total amount given solely by private individuals in 2020, contributions from the ultra-wealthy and their private foundations account for a substantial 36 per cent share, underlining the hugely important role of the of UHNW class in global philanthropy,” reads the report.
The report suggests, and this is supported by anecdotal evidence and a variety of superyacht projects, that the world’s wealthiest individuals have become gradually more engaged with philanthropy over the last 10 years. However, is this the result of a maturing moral compass, or is it simply that the largest proportion of the ultra-wealthy have aged and sufficiently stepped back from their businesses that they can focus on other projects?
It should be noted at this point that the amount of giving was bound to grow given that the number of UHNWIs globally has grown rapidly in recent years. As a result, more foundations, charities and institutions have been created providing a better opportunity for giving, as well as there simply being more cash available to give to philanthropic causes.
In conjunction with the pool of UHNWIs growing, there has been a huge movement of public opinion towards expecting wealthy individuals to give to society in ever greater amounts, whether that relates to tax, charity or otherwise. This growth in (very understandable) public pressure has almost certainly had a profound impact on the uptake of ESG in the world of business and the higher standards to which ultra-wealthy individuals are held in their private lives.
“Surging ultra-wealth levels have been accompanied by a rising expectation that the UHNW class should ‘give back’ to wider society. This has been driven by shifting attitudes towards civic engagement among a more diversified and multigenerational ultra-wealthy population, by its increasing awareness of global environmental and social issues, and by growing public consternation at rising social and economic inequality around the world (amplified by the fallout from the Covid-19 pandemic),” continues the report.
“The scale and manner of giving by ultra-wealthy individuals can not only have a transformative direct impact on the non-profit space, but can also influence wider philanthropic activity across the general population. High-profile initiatives, such as the Giving Pledge and the Founders Pledge, or visible individual donations to particular causes have the potential to inspire other segments of society to commit to greater philanthropic engagement.”
Interestingly, it is those ultra-wealthy who are between 50-70 years old that give the most to philanthropic causes, which is perhaps a reflection of a more mature attitude towards giving than found in the 70+ category. However, it those who are less than 50 that give least, although this is most likely down to these individuals focussing most of their energy and time on wealthy generation and growing their businesses.
Whether through social pressure or a growing awareness and sensitivity towards global issues, the ultra-wealthy population are giving more than ever before, and this is having and will continue to have a significant impact on the superyacht industry.
The perception of yachting has always been that it is an industry driven by greed and conspicuous consumption by individuals that care very little for the lives of layman and their concerns. However, the broad adoption of philanthropic endeavours on the part of the ultra-wealthy provides the superyacht industry with an opportunity for it to change how the world perceives it.
The future of the superyacht industry is creating projects and experiences that reflect the values of the users, whether owners or charter guests. As philanthropy begins to play an ever-greater role in the lives of the ultra-wealthy, the superyacht industry has an opportunity to design profound experiences in ever larger numbers that enable yachting to give back to communities and the environment. Much good work is already done by owners, yachts, crews and superyacht businesses, but as a business and community, we have only begun to scratch the surface of what is possible.
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