9 January 2015
The younger generation of millionaires is less concerned with
just making profits when it comes to investing and is more likely
to have ethical or social investments, according to research
released today by the Charities Aid Foundation.
The report – 'Philanthropy: A gift or investment?' – shows
79% of wealthy under 40s have an element of their portfolio
allocated to socially conscious investments, those with some degree
of social impact, compared to 57% of the over 40s.
For those under 40, this splits down into an average of 35%
socially conscious investments and 65% more traditional
investments. Portfolios of those above 40 look quite different,
with just under a fifth (19%) of investments being social and 81%
traditional.
This suggests that as much as £233 billion could already be
invested in the UK with the aim to achieve both social and
financial returns.
In total, 1,005 wealthy people were surveyed online in September
2013 by Scorpio Partnership on behalf of Charities Aid Foundation
(CAF).
Socially conscious investments range from investing in ethical
or sustainable companies, to giving zero-interest or low
interest-bearing loans to charities and social enterprises, to
dedicated socially-responsible investment (SRI) funds.
Over 100 individuals support charities and social enterprises
through Charities Aid Foundation's social investment funds, run by
its social investment arm CAF Venturesome. These funds provide
growing social purpose organisations with repayable finance so that
they can expand their activities or increase their financial
resilience.
When the charities repay, the money is loaned again and again,
multiplying its social impact. Since 2002, CAF Venturesome has
supported over 425 social organisations with £36m of social
investment.
Amy Clarke, Head of Private Clients at Charities Aid Foundation,
said: “It’s great to see younger wealthy generations looking for
new ways to use their money to create lasting positive change.
“It’s clear that people are becoming less interested in simply
achieving a financial return from their investments and are more
focused on balancing this with creating a social impact.
“While this research highlights a growing appetite for balancing
traditional giving with social investment, more can be done to grow
this trend and wealth advisors have a crucial role to play in
helping more clients start using their money for social good.”
Cath Tillotson, Managing Partner of Scorpio Partnership,
said: “Our research for CAF signals that we're likely to see
the under 40s pushing the frontier of social investment in the
future, exploring ways of incorporating this into their broader
investment portfolio.
"Fulfilling this potential will require wealth managers to
expand their capabilities, so that they are well equipped to advise
and support their clients on how to reflect social and ethical
values into their investment strategies".
Find out more and download a free copy of the report at
www.cafonline.org/giveorinvest
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