PBI speaks to Barclays Private Bank on philanthropy and its position in wealth management in 2023. Are clients still interested?
Patrick Brusnahan (PB): What is the state of philanthropy in 2023?
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Juliet Agnew, head of philanthropy at Barclays Private Bank (JA): Philanthropy has been going through a period of self-reflection in recent years. There is more understanding that inherent unequal power dynamics have exacerbated inequity and ultimately undermined efforts to solve social problems in some cases. It’s becoming more common to fund locally-led, community based organisations, and more donors are open to giving with less restrictions and over long time frames. More are open to collaboration which is also critical when it comes to complex social issues; and more focused on results. That said, it’s often only those donors that have been educated on philanthropy that understand these issues. Many start out in silos and, as a result, are probably not getting the advice and support they need.
There are also more conversations, particularly from the next generation, about the overall purpose and responsibility of holding significant wealth. This includes discussions about spending down (donating) family wealth, movements encouraging paying more tax, and using philanthropy to empower communities (reparative/restorative philanthropy) from which wealth was created (colonialism/extractive economies).
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By GlobalDataPB: What sort of clients are more likely to be engaged in philanthropy? Or is everybody interested?
Juliet Agnew: There is some evidence to suggest that “traditional” philanthropy is likely to be driven by older generations, matriarchs and patriarchs, versus next generation or younger wealth holders who are more interested in a combination of impact investing, blended finance as well as philanthropy. These younger clients often speak about aligning their finances with their values. There are also anecdotes to suggest that younger donors are more focused on addressing the root causes of problems and inequalities (systems change).
In reality, motivations are mixed and that giving spark may happen at different moments and for different reasons – faith, personal life event such as having children, experiencing a loss, or concern about leaving too much wealth to children. Whilst there’s no one profile of a philanthropist, there do seem to be some shared characteristics within donor groups such as next gen, women, tech entrepreneurs, and financial professionals.
PB: Has interest gone up or down in 2023, which could be described as a difficult year (geopolitical reasons, cost-of-living)?
Juliet Agnew: There’s some evidence that giving has gone up. I think those that are well-established with giving and have made a commitment to a Donor Advised Fund or foundation are more likely to continue and even increase in times of hardship. We see those that have not made philanthropic commitments in some cases more focused on personal financial management and reorganising this year; and perhaps they are reticent to try new things in a volatile or uncertain market. But this is not always the case. We have still seen requests from new donors and new charitable foundations set up throughout the year.
PB: Has ESG and impact investing taken some of the attention away from philanthropy?
Juliet Agnew: The reality is that philanthropy is a very different tool. As a form of capital it is highly flexible, able to fund a wide variety of organisations, issues, causes and sectors. It can flow quickly to areas that other types of capital cannot. It can take higher risks. The spectrum of capital really needs to be understood – there can be no replacing of philanthropy by investment, government or corporate finance. We need it all and they all have their place in addressing urgent social issues of our time, such as the Sustainable Development Goals.
