Bigger share of wealthy donors give; average gift grows

The share of wealthy households in the U.S. that give to charity grew to 98.4 percent in 2013, up 3.4 percentage points from 2011, and the average amount they give grew to $53,519, up 28 percent, a new study says.

Fifty percent of wealthy donors plan to give as much through 2018, while 35 percent plan to give more, says the 2014 U.S. Trust Study of High Net Worth Donors.

The study, based on a nationwide sample of 632 U.S. households with a net worth of $1 million or more, excluding the value of their home, or with annual household income of $200,000 or more, or both, recorded the highest rate of participation in charitable giving by high net worth households since the study began in 2006.

That rate of giving compares with 65 percent of the overall population in the U.S. who give to charity.

Still, average giving as a share of household income fell 1 percentage point as growth in income levels slightly outpaced growth in giving levels,  says the study, produced through an ongoing partnership with the Lilly Family School of Philanthropy at Indiana University.

Volunteering and giving

Seventy-five percent of survey participants volunteer with at least one nonprofit, and 59 percent of those who volunteered in 2013 contributed over 100 hours, while 34 percent contributed over 200 hours.

Wealthy donors who volunteered in 2013 gave $76,572 on average, compared to $44,137 donated by wealthy donors who did not volunteer and up from $62,302 in 2009.

Giving to education

Eighty-five percent of wealthy donors gave to education in 2013, with 73 percent giving to higher education and 60 percent giving to education from kindergarten through high school.

Education was the charitable subsector that received support from the biggest share of wealthy households, and also received the largest share of dollars, 27 percent, among all charitable sectors and more than giving to religious, environmental, arts, basic needs, and international causes combined.

The biggest share of wealthy households, 34 percent and 27 percent, made their biggest gifts to religious organizations and educational causes, respectively, with 19 percent making their biggest gifts to higher education, and 8 percent making their biggest gifts to K-12 education

Donors motivation, expectations

Seventy-four percent of wealthy household say believing their gift can make a difference was the top reason they gave, while personal satisfaction was cited by 73 percent; supporting the same causes annually by 66 percent; giving back to the community by 63 percent; and serving on a nonprofit’s board or volunteering for a nonprofit by 62 percent.

Only 34 percent of donors cited tax advantages among the main reasons they give.

Eighty-one percent of wealthy donors expect nonprofits they support to spend an “appropriate” amount of their donation on general administration and fundraising, while 80 percent expect them to demonstrate “sound” business and operational practices, 78 percent expect them to honor their request for privacy and anonymity, and 74 percent expect hem not to distribute their name to others.

Among wealthy donors who stopped giving to a specific charity they previously supported, 42 percent attributed their decision to having receiving solicitations too frequently or because the nonprofit asked for an “inappropriate” amount; 35 percent said they personally changed the focus of their philanthropy; 18 percent said the organization was not effective; and 16 percent said the nonprofit they supported had changed leadership or activities.

Strategic giving

Seventy-three percent of wealthy donors say they have a specific strategy in place to guide the charitable giving, and 93 percent say they give to a targeted set of organizations based on geography or a specific cause or issue.

Fifty-seven percent say they used a giving vehicle — such as private foundations, donor advised funds and charitable trusts — or plan to establish one to achieve their charitable goals.

Giving vehicles received 28 percent of charitable dollars in 2013, compared to giving directly to charitable subsectors such as the arts or environment, up from 23 percent in 2011.

Sixteen percent of wealthy donors gave to a donor advised fund in 2013, eight percent to a private foundation and four percent to a charitable trust.

Thirty-one percent of households with net worth of less than $1 million are likely to have or to plan to use a giving vehicle, compared to 51 percent of households with net worth between $1 million and $5 million, and 69 percent of households with net worth of $5 million or greater.

Eighty-four percent of wealthy donors are aware of innovative giving strategies such as socially responsible investing, social impact bonds or mission-related invested, but only 13 percent currently use those strategies.

Expertise and giving

Fourteen percent of wealthy donors rated themselves as “expert” in charitable giving and gave $150,299 on average in  2013, while 72 percent rated themselves as “knowledgeable” and gave $64,599 on average, and 14 percent rated themselves as “novice” and gave $19,013 on average.

Fifty-three percent of wealthy donors monitor or evaluate the impact of their giving.

Family giving

Sixty-one percent of wealthy donors  who are married or living with a partners make decisions about their giving jointly with their spouse or partner.

And forty-one percent of wealthy families have giving traditions such as volunteering as a family and giving to charity during the holidays.

Among the 75 percent of wealthy donors who volunteer, 68 percent are likely to volunteer with family and 68 percent are likely to volunteer with friends, compared to 25 percent who are likely to volunteer through a workplace campaign and 49 percent who are likely to volunteer through some other organized group.

Social issues and confidence

Education is the top policy issue for 56 percent of wealthy donors, compared to poverty, which is the top issue among 35 percent of wealthy donors; health care, 34 percent; and the environment, 28 percent.

Thirty-two percent of wealthy donors say they would increase their charitable contributions if government decreased funding for an organization their household supports.

Ninety-two percent of wealthy donors say hey have the most confidence in nonprofits to resolve domestic and global issues, compared to 91 percent who have the most confidence in individuals, 73 percent in religious institutions, 61 percent in state or local government, 58 percent in large corporations, 54 percent in the federal government, and 25 percent in Congress.

Todd Cohen

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