In 2020, we saw a shift in philanthropy. Faced with a global emergency, more people had the confidence to step forward and offer their help. Philanthropy is no longer about creating a legacy for the future – it is about creating change for the here and now.

When the Covid-19 pandemic sent countries across the world into crisis-mode, many high-net-worth individuals revaluated how they spent their wealth. Many sought to protect their assets, others reassessed their succession plans, and some looked for new opportunities. And for many, philanthropy became more important than ever.

Not only did Covid-19 highlight the need for access to healthcare, but it also shone a spotlight on inequality around the world.

Lots of high-net-worth individuals are self-determined to use their wealth, connections and skills to support those less fortunate than themselves during these unprecedented times. And one lasting impact of the pandemic and the growing awareness of social injustice is a sea change in how people see the possibilities that their wealth and, importantly, their efforts can achieve.

The rise in charitable giving

Charitable giving has largely declined during the pandemic with over two thirds of charities around the world reporting significant declines in donations1. In fact, 15% of charitable organisations say they’ve had to pause operations entirely as a result. Given that many people have faced income loss, it is understandable why they have decided to suspend their donations.

Yet for many high-net-worth individuals, recent events have urged them to give more back to society. From January to October 2020, the ultra-wealthy gave £7.4 billion2 to Covid-19 and social injustice pledges. To note a few high profile case, the Bill and Melinda Gates Foundation pledged an immediate $1.75 billion3 to support a global response, with the likes of Mark Zuckerberg and Madonna4 donating to the Foundation’s Covid-19 efforts.

Yet for many high-net-worth individuals, supporting causes has to go beyond donating wealth for the next generations and become more about taking an active role in making change happen today. 

From January to October 2020, the ultra-wealthy gave £7.4 billion 2 to Covid-19 and social injustice pledges.

Philanthropy takes a more active stance

Many self-determined philanthropists are no longer satisfied with making donations alone. Many high-net-worth individuals are now taking a more active role in setting the agenda for societal change.

There is also a growing emphasis on private businesses to move beyond tokenistic donations and instead choose working practices and projects that tackle ESG issues. Many investors are creating this pressure for change by actively choosing to invest in businesses that align with their values and personal goals. And these investment decisions5 are having an impact. In 2020, ESG funds accounted for 45% of all European equity flows6 in 2020.

To ensure that high-net-worth individuals can continue to use their wealth in a self-determined way, they need to have choice over every fund they invest in. That is why we build a high level of fund flexibility5 into all our life products.

The opportunity to build back better

Millennials – those born between 1981 and 1996 – are picking up the baton and running with it to inspire societal change using their wealth. A study found that of those who donated more than $1,000 to charities last year, 74% of millennials described themselves as philanthropists7 compared to just 35% of baby boomers. It is interesting that younger generations see their charitable endeavours as part of their identity.

This mindset is already influencing behaviours. A recent Deloitte survey found that over 70% of both millennials and generation Z said they would take actions to have a positive impact on their communities8. They also said they would make a special effort to more actively support local businesses.

Many high-net-worth individuals in these generations are now expected to take an active role in the family foundation9 as a gateway to taking on a larger role in the family business. We envisage younger investors to build on their experience in these roles and place a greater focus on active philanthropy when they come to take control of the baby boomer wealth.

Philanthropy that works for everyone

There is more than one way to take an active philanthropic position. While many people feel confident in taking their own actions to tackle societal issues, others prefer to make considerable donations to organisations that align with their personal goals. Either way, the onus is on wealth management strategies to allow as much flexibility as possible to adapt to changing expectations when it comes to philanthropic efforts.

Our Swiss Life Generations plan enables you to pursue your philanthropic endeavours in the way that you want. It generates additional liquidity that you can use to make charitable donations if you wish. At the same time, it helps to protect your wealth for the next generation, so that they can follow their own philanthropic journey.

The onus is on wealth management strategies to allow as much flexibility as possible to adapt to changing expectations when it comes to philanthropic efforts.

Create you future legacy

Life insurance products are another way to leave a substantial gift. There would be the option to choose a charity as a beneficiary. Our high life cover solution generates additional capital, which you can use to donate to charities and support humanitarian projects.