HIGH net worth individuals are risking the effectiveness of their philanthropy by not measuring the impact of their donations, says Moore Stephens, the accountancy and consultancy firm.
Its survey of family offices representing high net worth clients showed that while 86 per cent say measuring the impact of philanthropic donations is important, only 50 per cent are currently measuring their effectiveness.
According to Moore Stephens, the key aim of philanthropic activity for many high net worth individuals is to secure their “legacy” by making donations that make a genuine impact on a significant issue.
Such individuals are often much more personally involved with their philanthropic foundations than they are with their investments.
Geoff Woodhouse, partner at Moore Stephens, said: “The choice of a major philanthropic donation is one of the biggest decisions a family office will ever make, but it seems that the rigour applied to investments is not always applied in the same way to donations.”
The characteristics of successful philanthropic donation include undertaking comprehensive due diligence on candidate charities before engaging; working collaboratively throughout the process with the selected charities; assessing progress and impact of donations against metrics agreed prior to donation.
Moore Stephens found that the most popular philanthropic causes chosen by family offices are educational (81 per cent of family offices surveyed), arts & culture (70 per cent) and youth development (64 per cent). Nearly three quarters of family offices now make their philanthropic donations through a family foundation structure.