According to Wealth-X, a data analytics firm focused on the “ultra-rich”, very well to do people in Asia are relinquishing their wealth to charitable causes at a slower pace than their North American and European counterparts. The data also shows that they are losing wealth at a faster rate due to a combination of factors.

One of those “factors” is Hong Kong where the super-rich folks in the former British colony saw a 9 percent drop in wealth in 2018 before the current unrest that began earlier this year. It remains to be seen how they fared in 2019 but the outlook is not good as the anti-Chinese protests continue and businesses suffer.

Wealth-X Pte Ltd. is a company that provides financial institutions, luxury brands and not-for-profit organizations information on people who have a minimum of $30 million in assets. The information is used to gain access to the fortunate individuals in the hopes of getting them to willingly part with a bit of their wealth.

Financial institutions can offer back a return on investment, luxury brands can offer the latest “toys” and fashions while non-profits can only appeal to the charitable mood of the rich donor. If the Wealth-X data is accurate then that charitable mood is easier to find in the United States and Europe than in Asia.

Here are some other Wealth-X findings:

  • Asian people with ultra-high net worth (UHNW) gave away a combined 0.19 percent ($1.90 per every $1000) compared to North Americans at 0.65 percent ($6.50 / $1K) and Europeans at 0.56 percent ($5.60 / $1K)
  • Globally, charitable spending totaled US$153 billion in 2018 with North Americans and Europeans contributing the bulk at about $124 billion or 81%.
  • Older rich people tend to be more generous than wealthy younger people. Wealth-X suggests that older people are more interested in establishing their legacies while younger people are still working to build their businesses. The elderly may also be hoping to atone for past mistakes or any youthful lapses in judgment.
  • Education remains the leading charitable choice for nine in every 10 UHNW individuals.

To put the dollar figures in perspective, the philanthropy by all UHNW people is about equal to the U.S. federal budget for healthcare, education and energy. The $153 billion dwarfs the almost $35 billion spent by the United Nations on humanitarian and developmental help in 2018 and the $45 billion the World Bank loaned out to governments so far this year.

The trade war between China and the U.S. is another factor causing Asian’s wealthiest to devalue at a faster rate. If they seem unwilling to contribute to charity, the not-for-profit organizations may have to target those who have dropped off the Wealth-X list. People of any ethnicity in the “not quite” UHNW category still have a significant amount of money for charitable causes.

Wealthy Chinese
A Chinese couple shop at a Louis Vuitton store. REUTERS/ Carlos Barria
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