High-net-worth households gave almost as much to charity last year as they did in 2009 and most plan to donate at the same level or higher for the next three to five years despite the lagging economy, according to a new survey.
Average giving held steady at 9 percent of household income between 2009 and 2011 after a two percentage point drop from 2007, according to The 2012 Bank of America Study of High Net Worth Philanthropy. The study has been conducted every two years since 2006 in conjunction with the Center on Philanthropy at Indiana University.
But the average dollar amount per household declined, from $56,621 in 2009 to $52,770 last year. The largest gifts went to religious organizations, educational causes and health organizations.
Fifty-two percent say they plan to give as much, while 24 percent say they plan to give more through 2016.
The survey was made up of 700 individuals or households with a minimum of $200,000 in annual income and a net worth of at least $1 million not counting their primary residence.
Of the $300 billion given away in 2011, more than 70 percent was given by individuals and half of that was given by the wealthiest 3 percent of American households. Ninety-five percent of wealthy households give to at least one charity compared to 65 percent of the general population, they survey says.
The wealthy who volunteered their time increased to 89 percent in 2011, up 10 percentage points from 2009, according to the survey. More than half (54 percent) volunteered more than 100 hours for the year and 35 percent volunteered more than 200 hours. Those who volunteered more than 100 hours gave an average of more than $78,000 to charity, which is roughly twice the average given by those who volunteered less than 100 hours. Most who gave of their time served on the board of directors of their favorite charity and helped to plan events and fund raising.
Most (71 percent) have a specific strategy in place to guide their charitable giving and 61 percent have a budget for philanthropic activities, according to the survey.
The use of giving vehicles is on the rise, with 19 percent of wealthy households giving to such entities as foundations or donor advised funds, compared to 16 percent in 2009. Forty percent of wealthy donors consulted with a third party before making a donation and for 53 percent of those it was an accountant and for 37 percent it was a financial advisor.
The vast majority (74 percent) say they give because they feel their gift can make a difference, according to the survey. Only 31.7 percent say it is for tax benefits and 68.2 percent say they feel they are giving to an efficient organization.
About three quarters report a sense of fulfillment from their philanthropic activities and that they gain satisfaction from the impact their money can have on others.
The things that can prompt donors to stop giving are too frequent solicitations, a change of leadership at the charity or a change of circumstances for the donor family.
"Nonprofit organizations that understand what matters most to donors, that have a clearly articulated mission, and are transparent in the reporting of both their financials and the sustainability and efficiency of their operations have a significant advantage in attracting and maintaining relationships with wealthy donors," says Claire Costello, philanthropic practice executive for U.S. Trust, Bank of America Private Wealth Management.
–Karen DeMasters
