Wealth surge set to aid philanthropy

The number of millionaires in Africa, Asia and the Middle East is set to soar over the next 10 years

The number of people in Africa, Asia and the Middle East with a fortune of more than $30m is set to surge over the next 10 years, according to a March report, news that bodes well for regional trends in philanthropic spending.

Global property consultant Knight Frank predicts that the number of super-rich individuals in Asia will rise by 88 per cent to 2022, the joint highest rate of growth in any world region, matched only by Latin America. The combined wealth of these high-net-worth-individuals (HNWI) will be $12.6 trillion, the report said, making Asia the biggest hub for wealthy individuals outside of North America.

The Middle East will see a 58 per cent jump in the number of super-rich individuals, rising from 4,675 in 2012 to 7,378 a decade later. The region’s biggest rise will be in Iraq, which is poised for a 125 per cent increase from 162 to 365 HNWIs.

Africa will see a 69 per cent increase in its wealthy population, a reflection of the region’s rapidly growing economies. In some countries, the number of rich residents is expected to triple, a sign of the opportunities on offer in the resource-rich continent.

This swelling wealth is likely to go hand-in-hand with an uptick in philanthropic activities. In a global poll of private bankers and wealth advisors, the report found almost 10 per cent of respondents said their clients had increased their charitable giving in 2012. Just 1 per cent increased their spending on luxury goods.

In Asia, the trend was sharper. Some 22 per cent of respondents said their clients spent more last year on philanthropic activities than in 2011, the largest rise worldwide, outpacing the 19 per cent who reported a jump in luxury retail spend.

Philanthropic spending in the Middle East and Africa saw a slight rise. Just 1 per cent of those polled noted a rise in charitable giving. Luxury retail spending, however, remained flat.

“The wealthy don’t live in a vacuum; having a healthy society around them is good for their wellbeing as well as their wealth,” Maha Prabhu, head of philanthropy advisory services at private banking house Coutts, told the report. “You could call it a mixture of enlightened self-interest and compassion.

Philanthropy is also increasingly being used as a tool to aid the children of wealthy families in developing their financial skills, ahead of taking over the family fortune.

“This approach can be very beneficial for families as it helps them to work out what they really care about,” said Prabhu, adding that newer forms of philanthropy such as impact investing are drawing the attention of younger, entrepreneurial HNWIs.