Intermediation on the up

An interesting report has just come out predicting a boom in philanthropic advisory services in Europe from the Scorpio Partnership, a wealth managment consultancy (yes, rich people do still exist), commissioned by New Philanthropy Capital.

Based on a survey of wealth advisors in Europe, Scorpio found that only 50% of the private banks interviewed thought they were currently well placed to guide their clients’ philanthropy.  This matches with Scorpio’s previous survey which found that 90% of ultra high net worth individuals recognise the need for advice on their giving but don’t feel that their advisers are meeting that need.  The report also notes that the biggest weakness of the advisers is in selecting and monitoring projects for impact.

NPC spokesperson Plum Lomax summarises: “The wealth management industry ignores these challenges at its peril.  Despite the current economic downturn, factors such as rising wealth, fiscal change and a growing social conscience along with eagerness to see the impact of their donations will continue to fuel demand for philanthropy advice in the long term.”

Intermediaries in capitalism are often dismissed as ‘middlemen’ who add no value (for a large fee).  We argue that the growth of financial intermediaries has been a huge benefit to our economies by improving information flows and providing valuable expertise.  In the same way, philanthrocapitalism is driving the expansion in philanthropic intermediation that could bring huge benefit to those that philanthropy is trying to help by boosting the effectiveness of giving.