Charity donations have suffered as the super-rich are preferring to maintain their opulent lifestyle over philanthropy in the gloomy economic environment, a report by rating agency Crisil said on Tuesday.
“The high networth families give priority to maintain their lifestyle, which gives them the societal status, due to which, we have found some shifts in behaviours, with contributions to charity going down,” Crisil president (Research) Mukesh Agarwal told reporters here after releasing report.
He said the phenomenon of lifestyle maintenance is a universal factor across the high networth households (HNH) with all the segments showing a propensity to reallocate resources towards the purpose.
Self-made entrepreneurs and wealth inheritors are found to have chosen to cut down on charity, while the professionals dig into their savings for the purpose, Agarwal said, citing the report which has surveyed 150 HNH and relied on official data from a host of agencies.
Any family having a networth of over Rs. 25 crore qualifies to be an HNH, he said.
As a percentage of income allocation, contribution to charity and other philanthropic activities slipped to 4.4% in 2011 from 2010, the report titled ‘Top of the Pyramid’ commissioned by Kotak Wealth Management, said.
It found that there was 50% increase in spending on apparels and accessories by the HNHs in 2011 over 2010, followed by 23% hike in vintage spirits and liquor.
It said allocation towards meeting expenses has risen to 28.2% from the year ago’s 22.4%.