As the wealthy become even wealthier, the world has entered an “age of philanthropy,” with education the most popular focus of some 260,000 foundations globally, researchers said on Thursday.
Increasing numbers of rich individuals, families and corporations are setting up foundations for social investment amid persistent inequality, said study author Paula Johnson of Harvard University’s Hauser Institute for Civil Society.
Due to the rapid growth of wealth around the world, more individuals and families are creating philanthropic capital, she told the Thomson Reuters Foundation.
The richest 1 per cent of the world’s population owns half of its wealth, up from 43 per cent in 2008, propelled in part by gains in financial assets such as stocks and bonds.
Many super-rich residents of the United States have set up foundations that run their own programs or give grants, including Bill Gates of Microsoft, Warren Buffett, who heads the Berkshire Hathaway conglomerate, and the industrialist Koch brothers.
Many wealthy people were driven by a sense of moral obligation, as well as a fear that “when inequality becomes too acute it may threaten peace, stability and the free enterprise system that created such wealth.”AlexSava/iStockPhoto
There are more than 15 million millionaires and close to 2,000 billionaires in the world, while 10 per cent of the population lives on less than $1.90 a day, said the report, which was funded by the Swiss bank UBS.
Globally, foundations have combined assets of US$1.5 trillion, slightly more than the U.S. federal government’s 2018 budget, the report found in an assessment of 39 countries around the world, including in Asia, Latin America and Africa.
The sector is notable for its youth and recent growth. Almost three-quarters of 80,000 foundations that gave their age were started in the past 25 years, the report said.
“We indeed live in a ‘global age of philanthropy’,” according to the report. “If this trajectory continues, philanthropy will be poised to have an increasingly significant social and economic impact.”
Many wealthy people were driven by a sense of moral obligation, as well as a fear that “when inequality becomes too acute it may threaten peace, stability and the free enterprise system that created such wealth,” the report said.
Education was the main funding focus globally, followed by social welfare, health, arts and culture and reducing poverty.
“Education is seen as both a way to provide for individual opportunity – to bring individuals out of poverty – and at the same time as an engine for national growth,” Ms. Johnson said.
Researchers were unable to secure data from a large number of countries. About 95 percent of foundations surveyed were in Europe and the United States, where governments use tax incentives to encourage philanthropy.