“Entrepreneurs Can Save the World,” declares the front of the December 2 issue of Forbes. It’s the second annual “Philanthropy” edition of Forbes. But the headline might as well say “Entrepreneurs Can Save their Communities.” Forbes has studied the giving habits of millionaires around the world. These philanthropists are making a difference globally—and in their own neighborhoods.
Supported by Credit Suisse, Forbes Insights surveyed 317 millionaires regarding their attitudes toward giving. The study found that 54 percent of North American philanthropists focus their giving on local causes. Local giving on other continents is less focused. Among the philanthropists surveyed throughout the world, only 42 percent concentrate on giving locally.
Local values often form the basis for philanthropists’ giving decisions. Among reasons why philanthropists choose their causes:
Desire to give back to a local community: 32%
Connection to a local place, culture, or region: 29%
Knowledge of a geographic location: 29%
Impressions based on a formative experience: 27%
According to Forbes, “Giving to local and direct causes is closer to the heart, and philanthropists understand the needs better. It can also be more satisfying, as the results are usually more immediate. Philanthropy is, after all, a very personal issue.”
Giving to global causes becomes more prevalent among the wealthiest of philanthropists. While 29 percent of millionaires said that they focus their giving on global issues, 40 percent of those with investable assets over $50 million said that their focus is global. This is probably because the very wealthy are able to target more ambitious causes and because they tend to have more global connections.
Besides the 42 percent of millionaires around the world who focus on local philanthropy, and the 29 percent who focus on global causes, 22 percent give to “either, whichever advances my causes the most.” Another 7 percent say that they give to both local and global causes. Bill Drayton, founder of the social entrepreneur network Ashoka, tells Forbes, “It is important for people in any field to do what they love. We need both local and global giving.”
In addition to data on global and local philanthropy, the Forbes report includes findings about how millionaires pass philanthropic values on to their children. Philanthropists were also asked to share their views on the roots of poverty. Forty-seven percent of millionaires in North America and 49 percent in Latin America said lack of access to education was the biggest factor in poverty. Europeans, by contrast, said that lack of access to health care (38 percent) and lack of access to water (also 38 percent) were the biggest factors.
Another section of the study details how philanthropists measure the success of their gifts. The study found that about 42 percent of philanthropists hope to see the successful results of their investment within 10 years, and another 42 percent hope to see such results within 20 years. Forbes posits that localized giving is more likely to yield quick returns since it tends to be more focused.
While most of the study is a discussion of global philanthropy, Forbes affirms the benefits of local giving one more time in its conclusion: “Philanthropy is often about what an individual knows and loves. Giving locally to one’s town or community allows a philanthropist to address immediate issues as well as long-term change. Expertise and knowledge about community needs, as well as connections to the local population, are invaluable.”
© Capital Research Center 2014