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Understanding theAnatomy of GivingResearch shows giving is not a tax strategy,but a lie strategy.
seic.com/privatewealth
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The protracted wrangling overdecit reduction and tax codes inWashington in recent years has
raised concerns about the negativeimpact on charitable giving. Wouldthe elimination o tax deductionsact as a disincentive or the wealthy
to give, possibly crippling the non-prot sector?
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Such ears appear unounded, according to recent research rom SEI. Taxes are
not the main driver behind philanthropic giving, at least among the wealthy. Multi-
millionaires share their wealth because its part o who they are. It denes them
as individuals and gives purpose to their wealth. In act, most wealthy individuals
would give even more i they could develop a strategic approach to their
philanthropy and see clear evidence their gits are having the appropriate impact.
t sei c c b wly
l. m 200 l-ll w w ly $11 ll cpl
l y nb 2012. t c p k w wy
wly l wl.
i y w l w lp ppc , yll
cl l. i llw p, wll :
t wly clly , ly by pp wl.
ty wll p wc cl x , l
w l wl, w y b.
t bl b p l pp p . mly
by pl, ccl ppc pl wll-- y.
ty cl b pl c blc k w l-
y.
The greater the blessing, the greater the
responsibility to give back.Survey respondent
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2
understandingt
heanatomy
ofgiving
Why arent people giving more?ty, wly l cllcly l bll ll c y. illy y
llc 12% wl c lly. nbly, w lkly
- , wl 50 c y.
hw, w q b w c y wl lk llc c, b
jp clly ( 1). t 19% l wl.
W l bck? t c k c.
B wl ccp pc p c c fc, ly
c. g c c l pyc. ab 78% cl
l 85% bl k l cc wl.
g l p ly cy. Wl l ll wl wll lwy
b p q w c , pp
l c b . B ly cl , c p
lp lcy ll ply p.
B q : hw c ? hw c p p w
jpz wl? g c , w l bck?
Figure 1: Enormous potential or increased giving
Desired
future allocation
19.1%
Average
allocation now
12.2%
The
UHNW
giving
habit
r llc11.6%
l llc13.6%
ml llc11.3%
50 yllc
13.0%
ep llc11.7%
r llc17.0%
l llc21.2%
ml llc17.8%
50 yllc
20.4%
ep llc18.8%
The graphic to the let shows the average charitable allocations among various subsets o the ultra-high-net-worth market. As you can see, as a
group, they are generous in sharing their wealth. Whats impressive is what these individuals would like to give pending the removal o certain
barriers. The overall size o the allocations increases 63% on average. (Source: Scorpio Partnership and SEI)
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Determining when enough is enougha pl w c b cl . t cc bw
wl, z ppc . a y 2, bc
c w wl z (Cy, d, Plpy, c.).
W lk cy c ccl, p ppc, wl plpy, w c c, c b-lk. t q : hw c
w b c l z ?
i c, w lk cy, plpy pp b
mind-set w llc c. g w lp
. a wl c, pl-b , c pcp bl p
c q, wy pl, pl y.
hw, pl z bk blc. xpl, w,
wl, cl w plpy w wl ll. B y ypclly
qly by ppc ypclly pl .
By - pcp y by x c. t
c cl x j c c-k pc. a w 25%
c x b p fc c llc. t ,
l y c ly wc b p x b
fc cbl c k.
Figure 2: The nomenclature o giving
More tactical
100m
25m
10m
1m
The UHNW approach to giving More strategic
Personalnetwealth(USD)
Point at which this phrase starts being the
preferred main description for the processof allocating personal wealth to causes
Gifts
Charity
Donations
Philanthropy
Endowing
Research shows that words matter in the language o giving and provide a signal to how the ultra-high-net-worth approach it. Words like charity,
gits, and to a certain extent, donations, connote a more tactical approach. Words like philanthropy and endowing, however, appear to be
more strategic in nature. Its clear that people who approach it more strategically tend to give more. (Source: Scorpio Partnership and SEI)
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4
understandingt
heanatomy
ofgiving
Eliminating the federal middle man
oll, wl ly y pp wly l c x b y p c ( 3), y c cb c ql w
l x cl p. i, l y p
w c cly lp cy bc l l
w q.
t , w, wly l lly c x b
. Wl y b c w- , j y wl lly
b cly c y pp.
i l cl cplxy x c . s bcl
, wl p by pc. Cqly, pl ,
pcl, wl , c l plpy pc.
Figure 3: The inuence o tax benets on decisions to give
Overall
Male
Under50
50to59
60andover
Female
0%
0%
0%
0%
0%
0%
very important
important
somewhat important
not important
not at all important
Entrepreneur
Employee/Other
Retired
24%
18%
32%
19%
24%
26%
14%
32%
19%
24%
20%
25%
32%
20%
3%
21%
25%
33%
18%
1%
30%
11%
28%
23%
9%
22%
16%
35%
18%
10%
25%
15%
31%
22%
7%
25%
19%
33%
17%
7%
33%
33%
13%
13%
5%
As you can see, only a small
raction o survey respondents
said that tax benets were
very important to their
giving behavior. Overall about
one-third said that tax benets
are somewhat important,
while another third believe it
is not important (or not at all
important). (Source: ScorpioPartnership and SEI)
I dont give solely or tax purposes,but I want to maximize my tax benets andthe tax law is complicated and changing.
Survey respondent
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What drives the urge to give?s x, w pl ? t cll wl l kw
y y k c. J p, y
bl y w ly pc pl ccc ( 4).
t cc ccl. Wly l wll cly cpl
ply wll p w l- wl cy. t c l-pc
l. ty b bl wl c l .
Figure 4: The drivers o giving
% of respondents
0% 10% 20% 30% 40% 50%
I had more confidence. I had enough for myown lifestyle and to impact my family.
If the market improves my financial situation
If I found something I could be more passionate about
If I could more clearly see a direct impact
If it helped bring my family closer
If there was a bigger tax benefit
None of the above / I dont know
Other
17%
22%
32%
39%
41%
15%
12%
10%
SEIs research suggests that
even wealthy individuals must
consider their own nancial
circumstances when deciding
how much to give to a cause.
The perormance o the markets
is also a actor. Beyond personalcircumstances and markets,
giving is about being passionate
about a cause and having
condence in the impact o the
git. Bottom line: Instilling
passion in the giver, and allowing
him or her to see the results, will
prompt more giving. (Source:
Scorpio Partnership and SEI)
oc p py , c b wl. rc
ll c c b pp p l c b .
W l l cbl w pl c, y wll lkly c
by c 60% .
Instilling passion in the giver,and allowing him or her to see theresults, will prompt more giving.
Source: Scorpio Partnership and SEI
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6
understandingt
heanatomy
ofgiving
Figure 5: Wealth distribution preerences based on capital adequacy
32.2%
27.0%
10.9%
8.9%
8.3%
5.1%
3.5%
4.1%
UHNW allocationof surplus if
current financialneeds arecertainlysatisfied
33.7%
4.8%
4.2%
4.7%
20.6%
12.6%
11.3%
8.1%
UHNW allocationof surplus if
current financialneeds are
not certainlysatisfied
Family history of giving to an organization
Investing directly into businesses
Buying luxuries
Other
Investing in a portfolio for the future
Donating funds to selected causes
Buying physical assets (houses, cars, etc.)
Investing into your business
Source: Scorpio Partnership, SEI.
Note: responses are based on two
questions: (Let Pie Chart) I youreceived one million dollars today
and could do anything with it,
thinking about your current needs,
how much would you allocate in the
ollowing areas? (Right Pie Chart)
I you received another one million
dollars today and had no immediate
nancial needs, how much would
you allocate in the ollowing areas?
oc pl k q , wly l by w y bl
c k c. sc c wll bly y b l pl
cl c. t c cb k c w p
l- ly lcy , w c, cl-p c l cy.
t c clly w w c w w , jy
wly ppl wll cly k b cy. tpc c wl,
c l pp k.
Top fve areas where UHNWs plan to providefnancial support over the next 12 months:
1. Homelessness
2. Education
3. Society
4. Health
5. Human Rights
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Seeking guidance, building strategys w c y p c ppc ? hw c y b y
c? a w y blc wl w k
wl? Clly pl y c c lp.
uly, plpy cl lly w l. rc w wly
w lp. hw, w p, pl c b
lbl c . t :
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ebl
acc
Knowledgea wl c lp y
qy w c y
k c w jpz y
pl .
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pc y llc cpl
c llc cpl y
cl pl? elly, c lp
y pply k-b
y pl y
plpy pl. J y
lp y bl ll k
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pl l- y.
EnablementWl m c l
p k
pc. hw c y b b
y ? By w clly,
b plly. W ? i pl
c? s ly ? t l
k c? Blc k
cl l j
cl .
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c l xp y plp,
b plpc cy
pp. W b wy
l y q
pl wk?
Knowledge
Enablement
Calibration Access
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7/28/2019 UHNWs and the Anatomy of Giving: survey of giving amongst HNW individuals
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8
understandingt
heanatomy
ofgiving
Taking the broader viewt cl p w w wl ccl
pl b w wl b cy .
sply p, b ply c. t ky q p b
pp. Wy ppl ll? hw c y p c ppc? hw c
y b pc? a w c y lp?
Clly, wly l p b c y pp.
t pp p cl p c c, y ll
k c.
t p w blc. Wly l k blc cpl w
pl bl ccp wl.
Its harder than I thought to determinewhat to contribute to. Im learning.
Survey respondent
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Additional notes
* About the sample:
A total o 202 ultra-high-net-worth individuals residing in the USA took part in
the survey. The respondents were drawn rom a range o independent sources.
53% were sel-classied entrepreneurs. The average total nancial assets o the
individual respondents was $10.9 million with, or the vast majority, less than 20%
constituting their residential assets. The average annual income was $421,000 withindividuals worth more than $10 million having an average income $1.1 million per
annum. The sample had an average age o 53 with the largest portion (37%) living
in the Northeast. In terms o gender split, this was consistent with the previous
samples o 63% male.
This sample size is considered relevant in size and response levels or the
community o UHNW investors. The quantity in this latest survey was, in act, the
largest o all our surveys in this series to date. Indeed, overall, this survey program
continues to be among the largest o its kind ever undertaken. This, thereoreprovides a very special window into the belie systems and requirements o an
extremely difcult-to-reach client segment.
SEI Private Wealth Management provides individuals and amilies with an
innovative approach to wealth management. Our approach starts with knowing
our clients. To that end, we have sponsored a series o surveys, peer round-table
discussions and other work, all designed to uncover and share the insight o
wealthy individuals. The Anatomy o Giving Survey was conducted in partnership
with Scorpio Partnership Limited, an independent research rm.
SEI Private Wealth Management is an umbrella name or various lie and wealth services provided through SEI Investments Management
Corporation, a registered investment advisor.
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For more inormation, call 1-888-551-7872 or via email
[email protected] to reach a team member.
To learn more about SEI Private Wealth Management,please visit seic.com/privatewealth
1 vlly d
P.o. Bx 1100
ok, Pa 19456
seic.com/privatewealth
2013 SEI 121598 (03