In the United States, philanthropy has long been seen as a duty of those fortunate enough to earn or inherit great wealth and it's a concept that is rapidly catching on amongst wealthy individuals and families on this side of the Atlantic too.
According to Theresa Lloyd, author of Why Rich People Give, the main motivations for charitable giving are: belief in a cause; desire to make a social change; personal development (i.e. using and acquiring skills in a new direction); duty; personal fulfilment and fun. Her research, based on interviews with 76 UK millionaires with between assets of between £5m and £100m, also found a strong motivation amongst immigrant donors to benefit the society that gave them the opportunity to make their fortunes while many wealthy 'old money' clients retained a sense of noblesse oblige and a commitment to local causes.
Other than the sums of money involved, the distinction between philanthropy and charitable giving is not a clear one, but recent trends suggest that larger donors are taking a much proactive approach to their giving, by setting up their own foundations, taking an active interest in the charities they donate to and offering not only their cash but also their business skills to the charitable sector, the most high profile being Bill Gates, who plans to retire from the full-time management of Microsoft in 2008 to concentrate on running his charitable foundation.
Taking this approach further is the concept of venture philanthropy, in which (usually self-made) high net worth individuals bypass the charitable sector entirely and set up non-profit 'social enterprises' based on the business principles that made them their fortunes. In the UK, venture philanthropy is still in relative infancy, but the motivations behind its growth are also driving changes in more conventional forms of giving which still account for the vast majority of philanthropic activity. The traditional charity and NGO sector in all parts of the world has long been saddled with the reputation of being inefficient and unaccountable and high net worth donors are becoming increasingly circumspect about which organisations they would are willing to endow.
Donor requests for transparency from charities now goes well beyond just wanting to know what proportion of their income they spend on administration. High net worth donors want their spending accounted for and to be able to see value for money.
There is also a nascent trend for some high net worth individuals to donate other's foundation, most notably in 2006 when Warren Buffett, reputedly the richest person in the world after Bill Gates, donated £19bn to the latter's foundation in 2006.
Legal advice on philanthropy is often provided by lawyers who specialist in private client work, although it is becoming a legal specialism in its own right in the United States.
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