Making a positive impact on society through thoughtful investments of time, money or expertise is high on the agenda of HNWIs, finds the study ‘World Wealth Report 2014’ by Capgemini and RBS Wealth Management. “The numbers are telling: while 92% ascribe some level of importance to driving social impact, it is either extremely or very important to over 60% of HNWIs,” says the study.
It goes on to add: “While HNWIs in all countries surveyed place strong emphasis on driving social impact, those in emerging markets, especially Asia-Pacific, regard it most highly. India had the highest proportion of HNWIs who view driving social impact as either extremely or very important (90.5%), followed closely by China (89.4%) and Indonesia (89.2%). Hong Kong (82.1%) and Malaysia (81.1%) round out the top five. The prevalence of first-generation wealth creators looking to give back to their local communities is likely a key factor driving Asia-Pacific HNWIs to give back. While the desire to make a positive social impact cuts across all wealth segments, emphasis on it correlates with wealth level. More HNWIs between US$10 million and US$20 million rate it as extremely or very important (74.3%), compared to those with between US$5 million and US$10 million (68.5%) and those with more than US$20 million (62.0%). At 57.9%, HNWIs with the least wealth (between US$1 million and US$5 million) are slightly below the global average.”
According to the study, age plays a strong role in the desire of HNWIs to strive for social good. While 75.0% of those under 40 cite driving social impact as either extremely important or very important, the tendency declines about 10% with each age segment, reaching a low of 45.4% for those 60 and older. The desire to be true to personal or family values and to instill those values in their children top the list of HNWI motivations, with 87.5% and 80.9% of HNWIs, respectively, stating those drivers as important. A feeling of responsibility to give back is important for 76.5% of HNWIs.
The study says among the wide range of factors that motivate HNWIs to target making a social impact, personal and family values are the most important, especially for HNWIs in North America and Latin America (90.7% and 88.6%, respectively), as well as for those in higher age brackets and wealth segments. HNWIs also ranked the desire to instil social values in family and children as a top driver behind their allocations of wealth, time, and expertise to make a positive social impact, it adds, maintaining that this underscores a key concern of older, wealthier HNWIs: that the next generation has the maturity and social values to adequately manage significant inherited wealth.
The study also states that a feeling of responsibility to give back to society is the third most important driver of socially conscious HNWI activity, and is most pronounced among those in Asia- Pacific (excl. Japan) and North America. The majority of HNWIs globally inclined toward this driver are females between the ages of 50 and 59. While religion was not a top driver globally for HNWIs’ social impact activities, some countries in Asia- Pacific stood out as exceptions, such as Indonesia and Malaysia, where a high proportion of HNWIs cited religion as one of their top three social impact drivers.