We Americans consider ourselves some of the most charitable people on Earth. This may owe partly to the huge personal fortunes that Americans have given to charity, as well as or our internationally prominent philanthropic efforts, like the work of The Bill and Melinda Gates Foundation.
And we are correct by many measures, like those of the recent survey report by BNP Paribas, an international wealth-management firm. However other parts of the world are catching up, and take some of the shine off our exceptionalism. The BNP Paribas 2015 Individual Philanthropy Index report uses data from 400 individuals, each with investable assets of at least $5 million. It compares growth in individual philanthropy internationally and gives information about international trends in philanthropy.
Two important trends, or cultural shift in philanthropy, that the respondents identified were "impact or mission investing" and "collaboration." "Impact/mission investing," although not strictly philanthropy, is financial investing that prioritizes social and environmental concerns over financial returns. This was seen as the most promising approach to contributing to society by 52% of the respondents.
Collaboration between charitable organizations and between nonprofits and governments was seen as the second-most promising approach by 51% of the respondents. This is understandable because there are so many nonprofits and so much fragmentation in the sector. The greatest challenge these international philanthropists face may be similar to yours: the need to choose from the large number of causes and organizations.
We Americans may be world leaders in philanthropy, but Europe is close at our heels. The Index looked at growth in charitable giving in four large geographic areas: the United States, Europe, Asia, and the Middle East. The BNP Paribas Index Scores are based on a combination of three elements: percentage of annual income the respondents give to philanthropy, their advocacy for charitable causes, and their self-assessed effectiveness (based on factors such as cost-effectiveness, sustainability of beneficial effects, and replicability). Last year, American philanthropy by individuals ranked No. 1 among these four regions, with a Total Index Score of 57.5%. European philanthropy by individuals earned a Total Index Score of 55.5%.. Asia follows Europe with a 49.5% score in individual philanthropy, while Asia had a score of 30.3%.
All four of these geographic areas grew in personal philanthropy. This is good news for all of us, because more people from around the world are pitching in to address the world's challenges through philanthropy. It might be said that the globalization of markets is being reflected in an international growth in charitable giving.
It's good to know that a core challenge we face with our own charitable giving -- i.e., knowing which causes and nonprofits to fund -- also plagues super-wealthy individuals across the globe. As Andrew Carnegie once famously said, "It is more difficult to give money away intelligently than to earn it in the first place."
As a Motley Fool reader, you're interested in learning and being smart about your investing. Mark Ewert helps people to be as skilled at charitable giving as you are at investing, so contact him if you want some expert advice. You can purchase his new book, The Generosity Path: Finding the Richness in Giving, through his website or at your local bookstore.