Average giving amounts by wealthy households increased 15 percent during 2017 compared to two years ago, eclipsing an average $29,000. That’s the plan, even if impact is somewhat fuzzy.
And, nine out of 10 wealthy households gave to charity, according to the 2018 U.S. Trust Study of High Net Worth (HNW) Philanthropy released yesterday. The biennial survey is conducted in partnership with the Indiana University Lilly Family School of Philanthropy and this year’s edition is the seventh in a research series that began in 2006.
The vast majority of wealthy households expect to maintain (84 percent) or increase (4 percent) the amount they give to charity in 2018 under the new federal tax law passed late in 2017.
One-quarter of HNW donors gave to disaster relief efforts in 2017, motivated by “media coverage of the devastation and lack of confidence in government relief efforts,” according to the report’s authors. Hurricanes walloped Puerto Rico and Houston, Texas region and wildfires blazed across California last year.
Charitable giving (39 percent) and volunteering (32 percent) clearly ranked highest among seven choices for the potential to have the greatest impact. Next highest was voting for a political candidate who shares their ideals (16 percent). Yet, 54 percent said they do not know if their giving has the intended impact.
Tax benefits remain among the lowest priorities for giving by wealthy donors, at 17 percent, compared with 18 percent two years ago. More than half (54 percent) said they always gave because of their belief in an organization and 42 percent because of their belief that their gift can make a difference. One-third said they always give to support the same causes year after year and almost as many give to experience personal satisfaction, enjoyment or fulfillment.
Why do wealthy donors stop giving? Receiving solicitations too frequently was by far the most common reason (41 percent). Believing the organization was not effective or did not sufficiently communicate its effectiveness was cited by 16 percent of respondents and just less than 1 in 10 said the amount being asked was inappropriate. Some 28 percent of HNW donors stopped giving to at least one organization last year.
Almost half (48 percent) of HNW donors volunteered time to nonprofits and causes, a rate that’s nearly twice that of the general population (25 percent). Volunteering was highest (60 percent) among Hispanic respondents.
HNW households gave to an average of eight different nonprofits in 2017, the most popular charitable causes being:
- Basic needs, 54 percent;
- Religious or spiritual, 49 percent;
- Health care or medical research, 36 percent;
- Combined charities (i.e., United Way, United Jewish Appeal), 31 percent; and,
- Youth/family, 29 percent.
The least popular charitable causes that HNW households gave to were:
- International aid, 11 percent;
- Environment, 20 percent;
- Higher education, 22 percent;
- Arts and culture, 24 percent; and,
- K-12 education, 24 percent.
Women were more likely to support health care and medical research (49 percent) while African-American households supported basic needs (72 percent) and religious charities (64 percent) significantly more often.
Millennial donors are slightly less likely to give (84 percent) than older generations (90 percent) but more likely to participate in impact investing (16 percent).
“The giving patterns and preferences revealed by this year’s study point to an evolving philanthropic landscape driven by a younger and diverse group of donors who are reshaping the future of giving,” Ann Limberg, head of philanthropy and family office solutions at U.S. Trust, said in a news release announcing the survey results.
Among the 7 percent of wealthy donors who participate in impact investing, 68 percent do so in addition to existing charitable giving. Almost 20 percent do so in place of at least some charitable giving and 9 percent do so in place of their giving.
Researchers surveyed 1,646 households with a net worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more.
Baby Boomers made up just barely a majority of respondents (51 percent) and combined with those older, comprised two-thirds of the pool. Millennials (19 percent) and Generation X (14 percent) now account for a third of study respondents. Eight percent of respondents were born outside the U.S. and 20 percent reported that one or both parents were born outside the U.S. Almost 80 percent identified as Caucasian/White and 7 percent identified as LGBTQ.