Most Donors Give Cash, Unaware Of Alternatives

April 12, 2016       Andy Segedin      

Donor-advised funds, IRA distributions and charitable gift annuities might be buzz terms in the nonprofit community, but word has yet to spread to key players in the discussion: donors. Just 36 percent of donors report being aware of donor-advised funds, while 37 percent know of IRA charitable distributions and 51 percent are familiar with charitable gift annuities.

Nearly half (47 percent) of donors have never used a giving vehicle other than cash, despite having the means. Four out of five donors possess assets such as stocks, bonds and mutual funds, yet only 21 percent have contributed such assets to charity. Similarly, only 9 percent of donors have selected a charity as a beneficiary of a retirement or life insurance plan, despite 90 percent of donors having one.

The data comes from a survey of 950 consumers conducted by Fidelity Charitable of Boston, Mass. “Our research uncovered remarkably low awareness and use of the full range of tax-advantaged giving methods,” according to Matt Nash, Fidelity’s senior vice president of donor engagement. “This giving gap may limit potential savings and prevent people from giving more to the deserving charities they support.”

Alternative giving vehicles are least common among donors gifting less than $5,000 per year, with 69 percent having never used such a mechanism. Less than a quarter (24 percent) of donors giving more than $20,000 have never used a giving vehicle.

Other key findings from the report include:

* The majority of donors (63 percent) give in excess of $5,000 and to more than three organizations (65 percent). Donors giving more than $100,000 account for 12 percent of supporters and 14 percent of all donors support 11 or more organizations;

* Nearly two-thirds (64 percent) of donors give five or more hours of their time monthly to philanthropic activities such as volunteering. One-sixth (17 percent) of donors provide 20 or more hours;

* Donors younger than age 50 might have fewer assets, but earn and give more. Just a quarter of donors younger than 50 own investable assets in excess of $3 million, as compared to 38 percent of donors older than 50. They are far more likely, however, to have an income of $200,000 or more (70 percent to 48 percent) and give more than $20,000 per year, (47 percent to 16 percent); and,

* Four out of five donors budget their giving ahead of time. Slightly more than one-third (34 percent) of donors decide on a set amount to donate each year.

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