Ultra-high Net Worth Individual's Philanthropic Moves


Philanthropic Moves

The current relative stability, the growing importance of the region to the global economy, and the wealth of opportunities for impact make LatAm an intriguing and attractive region for philanthropic investments. 

Once virtually non-existent, LatAm’s philanthropic infrastructure is emerging with many possibilities for growth. In Mexico, 19 community foundations or similar organizations have been founded in recent years (Hispanics in Philanthropy).  

In Brazil, the most advanced country in LatAm in terms of socially responsible corporate organizations, the number of foundations grew by 157% between 1996 and 2002. The number of institutions is set to steadily expand throughout LatAm as the social focus becomes increasingly important for the large business sector (Fernando Rossetti, secretary of Grupo de Institutos, Fundaciones y Empresas Brasil - GIFE).

Profile of the UHNWI philanthropist in LA

There are an estimated 300,000 HNwIs in Latin America with a total financial asset wealth of USD6.2 billion as of 2007 - a staggering 20.4% leap from a total of USD4.2 billion in 2005. The surge in sudden wealth is mainly linked to higher global commodity and oil prices. (Capgemini-Merrill Lynch 2008 World Wealth Report) 

However, with philanthropic giving by wealthy Latin Americans well below their counterparts in other regions of the world -  

just 3% of financial assets donated compared to 12% by Asian HNWIs, 8% by Middle Eastern HNWIs; 8% by US HNWIs; and 5% European HNWIs. (Capgemini-Merrill Lynch 2007 World Wealth Report) 

Interestingly enough, LatAm was also the region with the highest global concentration of Ultra-HNWIs last year. Around 2.5% (9,600) of HNWIs in the region were ultra-rich in 2007, compared to 2% in Africa and 1.1% in the Middle East. (C-ML WW Report 2007) Several of these consist of "first generation money clients" with larger portfolios than in established markets - a new segment for which competence is highly important. **** 

The countries that generated the most HNWI wealth in the region last year were Brazil, Venezuela and Chile. (Ileana Van Der Linde for Capgemini in an interview with Andres Oppenheimer, El Nuevo Herald 18/08/08) 

Although these figures point to an alarming socio-economic trend of severe economic disparity in LatAm, local analysts have cast doubt upon their accuracy. The rich in LatAm are known to make donations confidentially, in a bid to avoid excessive publicity that may expose themselves or their loved ones to kidnapping and/or extorsion schemes that are common in LatAm, they have pointed out. (Oppenheimer, El Nuevo Herald 18/08/08) 

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