More from Fewer: The Growing Role of Ultra-Wealthy Donors

A new report from the London-based consultancy Altrata suggests that charitable donations are increasingly becoming “hyper-concentrated among a small group of ultra-wealthy mega-donors.”

The report’s findings suggest that the ultra-wealthy are wielding increasing influence across the philanthropic sector, which has far-reaching implications for charities, nonprofits, and philanthropies seeking and/or relying upon charitable donations.

“Everybody is rushing to the top of the pyramid.”

In a press release from Altrata, Lily Family School of Philanthropy dean Amir Pasic says the trend is already causing many nonprofits to rethink their fundraising strategies.

“A lot of nonprofits are pivoting to focus more on those major gifts and trying to figure out how to access wealthy donors and foundations,” Pasic said.

But in a world of limited philanthropic resources and competition among nonprofits to access them, the trend implies that we may see, or are already seeing, a race among nonprofits to reach these ultra-wealthy donors.

“Everybody is rushing to the top of the pyramid,” said Pasic. “But it’s becoming so concentrated they may be neglecting the importance of reaching out to tomorrow’s donors.”

Ultra-Wealthy Donors

The Altrata report defines “ultra-wealthy” or “ultra-high-net worth” (UHNW) donors as having a net worth of $30 million or more.

These donors, the report says, gave a total of $190 billion to philanthropic causes in 2022—an almost 25 percent increase from 2018—accounting for about 38 percent of all philanthropic giving.

And while big foundations and other institutional givers remain an important part of the philanthropic ecosystem, individual donors remain “the backbone of charitable giving,” the report says (5).

“The global ultra-wealthy population has expanded considerably.”

Given their growing prominence in philanthropy, “[t]here are significant gains to be made by organizations that can tailor their prospecting and engagement strategies to this demographic,” the report notes.

Among other key findings (1):

• About half of all UHNW donations came from ultra-wealthy donors in North America
• Ultra-wealthy donors are different: the report found ultra-wealthy donors to be idiosyncratic in their giving patterns, with little obvious connection between the source of a donor’s wealth and their giving patterns
• Almost one in five of all UHNW individuals has a private foundation, a finding which emphasizes the “growing number and importance of private charitable foundations”

Rising Wealth and Expectations

At least one reason the ultra-wealthy are becoming an increasingly prominent feature of the philanthropic landscape is simple: there are more of them.

The report states:

Globally, the ultra-wealthy (and other wealthy groups) have become progressively more involved in philanthropy over time. This reflects, to a large extent, the increasing number of ultra-wealthy individuals. Over the past decade, the global ultra-wealthy population has expanded considerably—by more than 40%—to more than 400,000 people in 2023 (with cumulative net worth of the ultra-wealthy rising even faster to total an immense $48trn). Higher overall wealth and shifting attitudes to civic engagement among a larger and more diversified wealthy class have driven an upward trend in giving activity, as has a broader awareness of social and environmental issues around the world (6).

Even within the category of ultra-wealthy donors, there exists a smaller but increasingly influential group of the global “super-rich”:

A major influence on the philanthropic landscape over this period has been a surge in the wealth of a small and exclusive group of the world’s ‘super-rich.’ This has raised the bar for potentially very large charitable donations from high-profile individuals, while also driving more widespread public acknowledgement of—and consternation at—the increasing levels of wealth and societal inequality in many countries (6).

The rise of ultra-wealthy donors could have various implications for the philanthropic landscape, the report says, noting that on the one hand, such giving can increase the visibility of particular causes, spurring further giving; and, on the other, that the increasing prominence of ultra-wealthy donors could cause a rising backlash against these donors for not doing more with their fortunes.

“In recent years, securing substantial gifts from high-net-worth individuals has proven more difficult.”

Indeed, the report finds that despite their increased giving, the available data suggest that “there is considerable scope for greater philanthropic activity from among many of the world’s wealthiest individuals.”

Implications for Nonprofits  

The trends highlighted by the Altrata report have various potentially significant implications for nonprofits and charities pursuing funding, according to Altrata experts consulted for the report.

Among them are new challenges in securing donations from ultra-wealthy donors.

“In recent years, securing substantial gifts from high-net-worth individuals has proven more difficult. Issues such as donor fatigue present complex challenges within the philanthropic landscape,” notes one Altrata expert (10).

Unlike more traditional institutional donors, ultra-wealthy individual donors, the report notes, are more likely to have idiosyncratic goals, to want to see their donations result in “visible and transformational impact,” and may be less likely to support longstanding organizations’ ongoing efforts.

Another key theme to emerge from the report is that such donors “are increasingly seeking impact and meaning from their giving activity” (13).

Because of this, “Developing personal connections is often the key to attracting new donors and encouraging sustainable funding to advance philanthropic progress” (13).

In order to secure donations from the ultra-wealthy, another Altrata expert argues, development offices “are having to really become proactive, rather than reactive, in how they approach fundraising opportunities” (11).

This may require nonprofits seeking funding to explore beyond their traditional geographic boundaries, the report says, with another Altrata expert noting: “A lot of organizations have traditionally relied on their local market for their major donors…but this is changing as they look to new markets for additional opportunities.”