Summit News

Bankers to help wealthy give again

GENEVA (Reuters) - The wealthy have scaled back charitable giving in the financial crisis but philanthropy is set to make a comeback as economies rebound and private bankers are looking to help their clients back favored causes.

JP Morgan Private Bank Managing Director Felipe Godard pauses during the Reuters Global Wealth Management Summit in Geneva October 7, 2009. REUTERS/Denis Balibouse

"People's pockets have hurt so the funding plans have reduced to a new reality," Felipe Godard, head of European International Markets at JP Morgan Private Bank JPM.N, told the Reuters Wealth Management Summit.

“But the appetite is still there,” he said, adding that clients across the Europe, Middle East and Africa region are still interested in giving and JP Morgan is using expertise built up in the United States to help customers elsewhere.

The wealth of high net worth individuals (HNWIs) dropped 19.5 percent in 2008, according to a report by Capgemini and Merrill Lynch Wealth Management. But it is forecast to start growing again at an annualised rate of 8.1 percent to $43.5 trillion by 2013, led by North America and Asia.

While charitable giving held up in the first half of 2008, it was hard hit in the fourth quarter as the wealthy gave less and focused on fewer causes, the report said, predicting the impact would be even greater in 2009:

“Sixty percent of North American HNWIs said they would be giving less in 2009 due to the economic downturn, though 54 percent of HNWIs in Japan said they planned to give more,” it added.

However, Francois Debiesse, head of wealth management at France's BNP Paribas BNPP.PA, said he had seen little effect from the crisis and has set up a four-person team dedicated to advising clients on philanthropy, offering investments in projects in fields like culture, health and the environment.

“Many clients worldwide are becoming more and more conscious about what they can do with philanthropy ... I am fully sure the future trend will be an increase,” he told the Reuters summit.


He noted that 60 percent of the $250 billion donated in 2006 was from the United States but said interest was increasing very rapidly in developing countries like China, India and Russia.

Christine Ong, head of UBS UBSN.VX Wealth Management in Singapore, said there had been an upsurge in Asian philanthropy as wealth had grown, mainly focused on providing social services or post-disaster relief, or supporting religious organizations.

“We have seen an increasing demand among our clients for a more focused, business-like and hands-on approach to philanthropy, where outcomes are measured and effectiveness tracked,” she said.

Thomas Rogerson, managing director of Family Wealth Services at BNY Mellon, the seventh-biggest U.S. wealth manager, saw a similar trend in the United States.

“Donors are saying ‘show me the results’,” Rogerson said. “These days it is more than just writing a check.”

Rogerson, who works with families that have from $5 million to more than $100 million in investable assets, also said ultra-wealthy families may want to partner with prominent foundations so that their dollars can go further.

Last week, several dozen clients of JPMorgan’s U.S. Private Bank met with members of the Bill & Melinda Gates Foundation to explore working together on healthcare.

Francois Reyl, chief executive of small Swiss private bank Reyl & Cie, said his firm advised clients on setting up private charities and helped them with the tax implications of giving.

“It’s good to give. You cannot reduce it solely to tax motivations. Of course gifts to charities provide for tax breaks but what we see with our private office clients is true conviction on a cause,” he said.

(Additional reporting by Svea Herbst-Bayliss in Boston and Kevin Lim in Singapore; Editing by Greg Mahlich)