A new report on legacies and wealth transfers says there is ‘enormous potential’ for charitable and philanthropic causes in Ireland.
The Community Foundation for Ireland report, Legacies for Good, Wealth Transfers and the Potential for Philanthropy in Ireland, features analysis of the current financial position of Irish households, and examines how household wealth will be passed on to the next generation. It highlights the substantial potential to increase philanthropic giving in Ireland.
The report states that the financial position of Irish households has more than fully recovered from the great recession of the late 2000’s. Irish Central Bank estimates puts net household wealth at €727 billion at the end of 2017, which is 1% above the mid-2007 pre-crisis peak, and almost 70% above the depths hit in mid-2012. It indicates that Irish households together are now wealthier than they have ever been.
Irish wealth is highly concentrated with the wealthiest 1% of adults owning 33% of all private wealth in 2017, and the top 5% owning about 50% of that total.
It is projected that the total amount of wealth available for inter-generational transfer at death could rise to somewhere between €9.6 billion and €14 billion per annum by the end of the 2017-2036 period, depending on the assumed rate of growth in wealth.
The report says the potential is not only a function of the huge wealth transfers that are in prospect, but also reflects the fact that Ireland currently underperforms other jurisdictions in terms of the scale of charitable bequests relative to the UK and USA.
In order to realise the potential of the growth in wealth for the charitable sector, the report states that the government should “avail of an early opportunity to restate its policy towards the charitable and philanthropic sector and examine tax incentives”, particularly in relation to inheritance tax, for gifts to charity.
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