Thursday, June 9, 2011
Philanthropy and Private Banking Part.II
For older donors, donating was good in itself, while for the new, the gift must be effective. The typical modern philanthropist made his fortune quickly, has an entrepreneurial mindset and will firstly give back to society part of what he has won and the other involved in the projects it supports. His archetype is Bill Gates, who created the foundation "Bill and Melinda Gates before his fortieth birthday and whose endowment now stands at over 35 billion dollars. There is currently strong demand from high net worth individuals to invest in philanthropy, both in Anglo-Saxon (which is an old trend) than in European countries (which is newer).
The increasing needs of the poor at local level in developed countries and at global level in some countries remained on the margins of globalization, also explains the renewed media attention to philanthropy.
Philanthropy is a segment whose financing requirements are increasing and in which many actors are willing to commit themselves, wealthy individuals as firms. The challenge in this sector lies in its ability to structure itself to meet the demand (need help finance the public interest) and supply (philanthropists want to give).
This need for structure has been highlighted by a study of Scorpio Partnership in 2007 showing that 90% of European philanthropists expressed the need to be advised on their philanthropic investments. They are looking for sound advice enabling them to make appropriate choices. The study also reveals that most of these philanthropists are willing to pay to dispose of such boards, and opens a huge market for private banks.
By their knowledge of financial products they have, and they affect the public, private banks can take part in the expansion of philanthropy by offering:
* Product socially responsible investment.
* Investments in philanthropic or charitable funds.
* Advice to clients wishing to establish a foundation.