New Vistra report reveals key insights into wealth and philanthropy 

Titled ‘Global Private Wealth and the Future of Philanthropy 2021: Looking Beyond the Covid-19 Pandemic’, the report considers the views of 225 high-net-worth and ultra-high-net-worth individuals across the globe, and reveals key insights and the approach to wealth planning adopted by these individuals. 

This research was conducted amidst the Covid-19 pandemic in the third quarter of 2020 – a context which influenced many of the responses and shifts reflected in the report. 

“2020 has been a watershed year in more ways than one. In the area of private wealth, we have seen clients diversifying their wealth allocation, some of which include an increase in philanthropic contributions, especially in the areas of health and environment. That said, while the coronavirus pandemic has alerted many to the fragility of human life, the importance of succession planning has yet to sink in with the majority of respondents. By launching this report, we hope to heighten awareness of how wealth planning and philanthropic investment must evolve with the times,” said Chris Marquis, Global Head of Private Wealth, Vistra. 

“It’s also worth noting that there is no one-size-fits-all approach to wealth planning and philanthropic engagement, as we’ve seen approaches vary significantly across regions. Indeed, factors such as differing laws, religious and cultural perspectives on charity, as well as government attitudes to wealth, all weigh in on how individuals from different regions choose to manage their assets”, said Chris.   

The report features insights from Vistra leaders around the world into why there were such key differences across the regions.

Headline findings

1.    An increase in philanthropic commitment in 2020, particularly for health and environmental initiatives 

36% of respondents have stated an increase in their philanthropic activities in 2020, which was partly catalysed by the coronavirus pandemic. This is evident from the significant growth in philanthropic contribution to health and environmental initiatives, which look to remain the top beneficiaries of corporate and private donation in the next 12 months. 

In addition, people appear to be more flexible and reactive in their giving – responding quickly to matters happening around them on a large scale. There has been a trend from passive to active philanthropy and the pandemic has accelerated this. This shift is also echoed in how respondents are involved in running a foundation where only 24% were actively involved, but 57% plan to be in the year ahead. 

2.    Lack of urgency for succession planning 

While the pandemic has put our mortality into perspective and many respondents highlighted succession planning as a priority, there seems to be a disconnect between the urgency and actual planning for succession. Just 52% of respondents report having a succession plan in place, and this number only rises to 73% among the highest age group (those over 60), with only 18% in the under 40s age group. 

This may highlight that although Covid-19 may have created a short-term sense of urgency, the survey points to a far less structured approach when it comes to how often succession plans are reviewed and updated. Periodic reviews of succession plans are not common practice, with 58% stating that they only review such plans on an ad hoc / as needed basis and a further 22% only do so every five year or more. Only 1% review it annually and 19% biannually.

3.    With the pandemic, the importance of each ESG element has increased, but environmental continues to remains low on investment considerations

Considering the rise of environmental, social and governance (ESG) investment, alongside a broader awareness of climate issues globally, the survey also examined attitudes towards ESG investment. The element of ESG which was most important when making an investment decision was social (41%), followed by corporate governance (31%) and then environment (28%). 

However, since the pandemic, there has been a major increase in the importance of each element of ESG – 61% put greater importance on corporate governance, 51% on social and 33% on environment. We see that environment features lowest across all respondents – however as we noted above, this is contrary to philanthropic endeavours where environment is a high priority for many.

4.    Social media’s influence on philanthropic efforts 

Although family, friends and advisers have a key influence, with the rise of digitalisation, 48% of the respondents indicate that they use social media to source philanthropic projects and 37% use web searches. The natural inference is that this is simply a result of the times we currently live in, as well as an extension of the crowdfunding model that relies so heavily on social media networks. While it is understandable that the proliferation of social media has opened everyone up to projects that they might not have come across otherwise, it does stress the importance of appropriate due diligence on any philanthropic endeavour.

For a more in-depth look at the ‘Global Private Wealth and the Future of Philanthropy 2021: Looking Beyond the Covid-19 Pandemic’ report, including regional findings, please click here. 

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Sylvia Evans, Head of Communications

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