Family offices, which manage the wealth of ultra-high-net-worth individuals (UHNWIs), are set to significantly increase their philanthropic activities over the next two years, according to a global survey conducted by Ocorian, a specialist provider of services to high-net-worth clients, financial institutions and family offices. The survey that around 70% of family office professionals expect philanthropic spending to rise by 15% or more during this period, with a quarter of respondents anticipating an increase of over 20%. However, despite the expected surge in giving, family offices also expect to see some form of return on their philanthropic investments.

Philanthropic spending

The study, which involved interviews with over 300 family office professionals managing a collective $155bn in assets under management, found that healthcare and medical research were the most common sectors for family office philanthropy. Two-thirds (67%) of respondents indicated their family offices were focused on these areas, while more than half (51%) reported a focus on diversity, equity and inclusion. Other sectors identified for giving included access to clean water (43%), climate change (41%) and housing (29%).

Expectations on returns

However, the Ocorian research also highlighted a key trend: family offices are not content to simply give money without expecting a return. The survey found that around two-thirds (67%) of family office professionals expect to see some form of return on at least 25% of their philanthropic donations. In fact, 16% of respondents stated they would expect to see a return on 50% or more of their philanthropic contributions.

The demand for financial returns from philanthropic giving reflects a broader trend towards increased involvement and control among family offices in how their charitable donations are structured and utilised. Family office professionals, particularly those managing multi-family offices, appear to be prioritising flexibility and oversight, ensuring their philanthropy aligns with their broader financial goals.

Flexibility and control

Lynda O’Mahoney, global head of business development - private client at Ocorian, commented on the findings: “The level of philanthropy from family offices and UHNW families is increasing and they’re less interested in their money going into a vacuum--they are enjoying increasing involvement and want to see tangible outcomes from their donations.” She also noted a shift towards greater flexibility in charitable giving, particularly among families from the Middle East, who are increasingly setting up Jersey-based charitable structures. These structures allow for flexibility in directing donations to a range of international charities, from the UK to Africa, without cumbersome regulatory controls.

This trend of maintaining greater control over philanthropic giving mirrors a broader demand for oversight in family office investments. O’Mahoney explained: “We see families carefully planning and seeking advice on how to structure their donations so that they can see the impact they seek.” The preference for structures that allow continued involvement and oversight in charitable giving is also creating demand for charitable trusts, with some seeing them as a status symbol for UHNW families.

Tracey Neuman, private client executive at Ocorian, noted that charitable trusts have become essential for UHNWIs, saying, “Charitable trusts are the new superyachts. You simply have to have one if you are an ultra-high-net-worth individual.”