Worldwide giving by middle class could reach $224bn (£146bn) annually by 2030
Huge growth of the global middle class could lead to worldwide charitable giving of $224bn (£146bn) a year by 2030, if people in rapidly developing economies give in line with the UK, according to a report published by the Charities Aid Foundation (CAF) on 26 February 2013.
Middle class giving could provide enough to wipe out extreme poverty, the report suggests, if the world’s middle classes match the average 0.4% of spending donated by charity by people in the UK. It would also be larger than the gross domestic product of Ireland, the world’s 44th largest economy.
The Future World Giving report aims to estimate the possible extent of charitable giving around the world if governments and the voluntary sector were to harness the potential of the huge expansion of the middle classes.
The potential for future giving does not rest solely with the middle classes. An explosion in the numbers of the global super-rich, fuelled by the rapid growth of developing economies, represents an opportunity to harness huge discretionary incomes, the report says. The number of people worth $100m or more predicted to grow from 63,000 in 2011 to 86,000 by 2016.
John Low, chief executive of the Charities Aid Foundation, said: “Governments and civil society across the world need to harness these powerful social trends. We need to prepare for these changes now to make sure that people can support the causes they care about with confidence and ease."
The number of middle class people globally is projected to grow by 165% by 2030 - from 1.8bn in 2009 to 4.9bn in 2030 - according to OECD data, with their spending power set to grow by 161% over the same period.
Seventy per cent of this growth is forecast to occur outside the traditional world centres of giving in Europe and North America.
“Across the world developing economies are growing at a phenomenal rate as countries like China, India and Brazil emerge as economic superpowers,” Low said: “The massive expansion of wealth that will come from this social change means there will be vast untapped potential for people to contribute to causes in their countries and across the globe.”
CAF is launching a major project to examine how governments and civil society around the world can make these levels of giving a reality by promoting charitable giving. They will produce a series of three reports covering accountability and transparency, independence and sustainability, and incentives.