Giving Compass' Take:

• Fang Block, writing for Barron's, discusses how ultra-high-net-worth philanthropists are using charitable giving to create and contribute to businesses. 

• How are philanthropists leveraging both social and financial capital to provide to businesses? 

• Read more about how the ultra-high net worth individuals are giving. 

Compared to mass donors or even high-net-worth donors, the ultra-high-net-worth (UHNW) population tends to leverage their social capital—their reputations and business track records—in addition to their own private funds, to find solutions to causes they are passionate about.

“They have more resources to deal with the type of philanthropy that’s more complex and transformational,” Renner says.

Globally, the ultra-wealthy, who have assets above $30 million, have a higher percentage of participation in philanthropy than the next tier, the high-net-worth (HNW) population—those with a net worth of between $1 million and $30 million, according to Wealth-X, a New York-based wealth information and insight provider.

However, no matter what their wealth tiers are, “when it comes to the kind of philanthropy they support, they follow their passion according to their ability,” Schiller says. Specifically, the top three causes the HNW population supports are education (27.9%), social services (15.7%), arts, and culture and humanities (12.2%). The top three for the UHNW group are education (33%), social services (17.6%), and health (9.1%).

  • UHNW Gifting is More Transformational: Generally speaking, most people in the high-net-worth category might prioritize preserving wealth for their family, and donate to existing charitable programs they can target strategically, says Carol Kroch, the national director of philanthropic planning for Wilmington Trust.
  • Donors Are Motivated to Give for Similar Reasons: It’s worth pointing out that donors, no matter what wealth tiers they belong to, share a great deal of common ground in terms of philanthropy, experts say.
  • Donor-Advised Funds Are Becoming a Popular Giving Vehicle: Traditionally, ultra-wealthy donors conduct philanthropy through their private foundations, which they take a generational approach to governing and running.  However, the donor-advised fund, a vehicle that many high-net-worth individuals use to make charitable contributions, is gaining popularity among the top wealth tier.

Read the full article about high net-worth philanthropists by Fang Block at Barron's