The hardships created by the coronavirus pandemic are prompting philanthropists to look at their giving in a new light, according to Judy Spalthoff, managing director and head of family and philanthropy advisory services in the Americas at UBS.
UBS clients who are able to give during the current hard economic times have a heightened awareness of both local and global needs, Spalthoff said.
“We are having conversations with high-net-worth clients who are focused on giving this year,” she said. “They are giving more because they want to honor their previous commitments, while also giving to those in need right now.”
The annual report on giving in the United States compiled by the Indiana University Lilly Family School of Philanthropy for the Giving USA Foundation was published on Tuesday and showed that giving in 2019 topped $449 billion, reaching nearly the same level as 2017, which was the highest giving year on record.
The giving categories that could be affected by Covid-19 all saw increases in 2019 over 2018. Giving to human services causes increased by 5%, totaling $55.99 billion; giving to health organizations increased by 6.8% to $41.46 billion, and giving to public-society benefit organizations increased by 13.1%, to $37.16 billion.
2020 may present a unique environment for this philanthropy. Each of the categories that address human needs directly may get an additional boost this year, Spalthoff noted.
“We are not seeing a decrease in giving by our clients this year,” she said. “Instead, we are seeing a hyper-focus on philanthropy.”
There may be a consolidation of charitable organizations with similar missions because some charities are having a,difficult time, she said. There are 105 million charities in the United States alone. Some wealthy families are considering giving more to one or two charities instead of giving smaller amounts to more organizations, she said.
Families are spending more time together, which can be an opportunity to talk about their family mission and legacy. “Wealthy families are taking the time to see what they have in common with each other. They have more time now and that is driving these legacy conversations,” she said.
Advisors need to help their client families keep their mission relevant.
“When the wealth will outlive the family members, it can help to have a third party facilitate the family’s mission statement,” she said. “In order for multiple-generational giving to work, the plan needs to have focus but also be flexible.”