This is the age of philanthropy

LONDON: As the rich get richer, the world has entered an “age of philanthropy”, with education the most popular focus of 260 000 foundations globally, researchers revealed this week.

Increasing numbers of rich individuals, families and corporations are setting up foundations for social investment amid persistent inequality, said study author Paula Johnson of Harvard University’s Hauser Institute for Civil Society.

“Due to the rapid growth of wealth around the world, more individuals and families have the ability to create philanthropic capital,” she said.

The richest 1% of the world’s population owns half of its wealth, up from 43% in 2008, propelled in part by gains in financial assets such as stocks and bonds.

Many super rich Americans have set up foundations which run their own programmes or give grants, including Bill Gates of Microsoft, Warren Buffett, who heads the Berkshire Hathaway conglomerate, and the industrialist Koch brothers.

Golden age

There are more than 15 million millionaires and almost 2 000 billionaires in the world, while 10% of the population live on less than $1.90 (R24) a day, said the report, which was funded by UBS.

Globally, foundations have combined assets of $1.5 trillion – slightly more than the US federal government’s 2018 budget – the report found in an assessment of 39 countries covering Asia, Latin America and Africa.

The sector is notable for its youth and recent growth. Almost threequarters of 80 000 foundations that gave their age were started in the last 25 years, the report said.

“We indeed live in a global age of philanthropy,” it said. “If this trajectory continues, philanthropy will be poised to have an increasingly significant social and economic impact.”

Many wealthy people were driven by a sense of moral obligation, as well as a fear that “when inequality becomes too acute it may threaten peace, stability, and the free enterprise system that created such wealth,” it said.

Education was the main funding focus globally, followed by social welfare, health, arts and culture and reducing poverty.

“Education is seen as both a way to provide for individual opportunity – to bring individuals out of poverty – and as an engine for national growth,” Johnson said.

Researchers were unable to get data from many countries. About 95% of foundations surveyed were in Europe and the US, where governments use tax incentives to encourage philanthropy. – Reuters