New Study Offers Insight Into the Motivations,
Expectations and Behaviors of Various Demographic Segments of
Wealthy Donors
Most wealthy individuals believe charitable giving (45 percent)
and volunteering (31 percent) have the greatest potential for
positive impact on society –far more so than voting for (13
percent) or contributing to (1 percent) a political candidate who
shares their ideals on topics important to them – according to the
2016 U.S. Trust® Study of High Net Worth Philanthropy. Through an
ongoing partnership with the Indiana University Lilly Family School
of Philanthropy, the sixth in this series of biennial studies
reveals a strong commitment to charitable causes among high net
worth (HNW) households, and giving and volunteering levels poised
to increase in future years:
- Last year, the vast majority (91
percent) of HNW households donated to charity. This high rate of
giving among the wealthy compares with 59 percent of the U.S.
general population who donate to charity.1
- Fifty percent of wealthy individuals
volunteered their time and talents last year to charitable
organizations they care about – twice the rate of the general
population (25 percent).2
- The study offers an optimistic view of
future giving levels, with 83 percent of wealthy individuals
planning to give as much (55 percent) or more (28 percent) in the
next three years (through 2018) than they have in the past. Women,
African Americans, and younger individuals (age 50 and under) are
even more likely to increase their giving in the next three
years.
- Future levels of volunteerism are also
promising. Among wealthy individuals who currently volunteer, 90
percent say they plan to do so as much (60 percent) or more (30
percent) over the next three years. Even among those who did not
volunteer last year, 39 percent plan to do so during the coming
years.
“Wealthy donors continue to be incredibly generous with their
time and money in support of social change in their communities and
in the world,” said Claire Costello, national philanthropic
practice executive for U.S. Trust. “And while their charitable
activity is driven to a large extent by their personal values and
convictions, donors are also listening closely to the needs of
nonprofits as they make their giving and volunteering
decisions.”
This research series is the most comprehensive and
longest-running of its kind, and an important barometer for wealthy
donors’ charitable engagement and perspectives. Key findings from
this latest research offer valuable insights that help inform the
strategies of nonprofit professionals, wealthy donors and
charitable advisors alike. The study is based on a nationally
representative random sample of wealthy individuals, including, for
the first time, deeper analysis based on age, gender, sexual
orientation and race. This expanded methodology enables further
exploration of the philanthropic trends, strategies, and behaviors
among the HNW population.
And the recipients are…
On average, wealthy donors gave to eight different nonprofit
organizations last year. However, this number varied based on a
donor’s age – for instance, donors over the age of 70 gave to an
average of 11 organizations and baby boomers gave to seven, whereas
younger donors (age 50 and under) gave to five.
Sixty-three percent of wealthy donors gave to basic needs
organizations last year – making it the charitable subsector
supported by the largest percentage of HNW households. Additional
causes supported by the greatest percentages of wealthy donors
included religion (50 percent), education (45 percent), the
environment (42 percent) and health (40 percent). With respect to
giving to education, 31 percent of respondents gave to higher
education and 33 percent gave to K–12 education.
Volunteers give more
Among the wealthy, volunteering with a nonprofit organization
has a strong correlation with giving to that organization. A large
majority of HNW individuals (84 percent) give financially to at
least some of the organizations with which they volunteer, while 49
percent give to most, if not all, of the organizations where they
volunteer.
The study found that volunteerism also has an influence on
giving levels. Wealthy individuals who volunteered in 2015 gave 56
percent more on average than those who did not volunteer.3
While many wealthy individuals experience a high degree of
personal fulfillment from their charitable giving (42 percent),
even more experience it through their volunteerism (63 percent).
Women reported deriving greater levels of fulfillment from
volunteering than men, as did younger individuals when compared to
those over the age of 50.
Motivations, expectations and challenges
A variety of motivations drive HNW philanthropy. In 2015,
wealthy households cited the following among the primary reasons
they give: believing in the mission of the organization (54
percent); believing that their gift can make a difference (44
percent); experiencing personal satisfaction, enjoyment or
fulfillment (39 percent); supporting the same causes annually (36
percent); giving back to the community (27 percent); and adhering
to religious beliefs (23 percent). Just 18 percent of wealthy
donors said they gave largely because of tax benefits in 2015.
Wealthy donors have strong feelings about how the nonprofits
they support should use their contributions and conduct themselves.
After making a charitable gift, 89 percent of wealthy donors said
it is important that the organization spend only a reasonable
amount of their donation on general administrative and fundraising
expenses. Wealthy donors also indicated that it is important that
the organization demonstrate sound business and operational
practices (89 percent), acknowledge donations by providing a
receipt for tax purposes (88 percent), not distribute their names
to others (84 percent), and honor their requests for anonymity (83
percent) and for how their gift is to be used (83 percent).
Nearly one out of five wealthy individuals stopped giving to at
least one nonprofit organization last year. When individuals
stopped giving to a particular charity they previously supported,
among the reasons cited were because they received too frequent
solicitation from the organization (41 percent), circumstances in
their household changed (40 percent), the organization was not
effective or did not sufficiently communicate its effectiveness (18
percent), or the organization asked for an amount the donor felt
was inappropriate (14 percent).
Wealthy individuals reported their greatest challenge when it
comes to charitable giving is identifying what causes they care
about and deciding where to donate (67 percent). Other charitable
giving challenges include understanding how much they can afford to
give (50 percent), allocating time to volunteer with the
organizations they care about (45 percent), and monitoring giving
to ensure it has its intended impact (37 percent).
This study also found that, among the 33 percent of wealthy
donors who participate in impact investing, 61 percent approach it
as something they do in addition to their existing charitable
giving, whereas 34 percent do so in place of at least some of their
charitable giving. And just 5 percent of wealthy donors participate
in impact investing in place of all of their charitable giving.
Higher levels of charitable giving knowledge improve the
giving experience
The study found notable relationships between wealthy
individuals’ level of knowledge about giving and their giving
behaviors and characteristics. When comparing individuals by levels
of charitable giving knowledge (i.e., expert, knowledgeable,
novice), higher levels of knowledge directly correlate with whether
individuals monitor the impact of their giving, believe their
giving is having its intended impact, consult with advisors, and
utilize giving vehicles (e.g., private foundation, donor-advised
fund), as well as with greater personal fulfillment from giving and
higher average giving amounts.
Overall, 44 percent of wealthy donors believe their giving is
having the impact they intended, while 54 percent are not sure
whether their gifts are achieving the impact they desire. This may
be partly due to the fact that 78 percent of wealthy donors do not
monitor or evaluate the impact of their charitable giving.
Nearly all wealthy individuals (94 percent) would like to be
more knowledgeable about at least one aspect of charitable giving,
with the highest percentages of these individuals interested in
learning how to identify the right volunteer opportunities (42
percent), becoming more familiar with nonprofits and how they serve
their constituents’ needs (29 percent), and how to engage the next
generation in philanthropic giving (20 percent).
“Nonprofits that understand the priorities and expectations of
their wealthy donors, engage them in meaningful and fulfilling
ways, and communicate the organization’s impact can effectively
partner with donors to achieve their mutual goals for a better
world,” said Una Osili, Ph.D., professor of economics and
philanthropic studies and director of research for the Indiana
University Lilly Family School of Philanthropy.
Making giving a family affair
Among the 79 percent of HNW households surveyed who indicated
having children, grandchildren or other younger relatives, just 21
percent have family traditions around giving, such as volunteering
as a family or giving together to charity during the holidays.
African Americans, Asian Americans, Hispanics and women were
significantly more likely to indicate that their household has
family traditions around giving. Younger individuals were twice as
likely to have family traditions around giving as those over the
age of 50.
Similarly, far more individuals reported not involving their
younger relatives in their giving (72 percent) than those who do
(28 percent). Once again, African Americans, Hispanics, women and
younger individuals were significantly more likely to indicate that
they have involved younger relatives in their giving. Among wealthy
individuals who involve younger relatives in their giving, the
majority found the experience personally rewarding (77
percent).
When asked how they would like to ultimately distribute their
wealth, HNW individuals reported that they intend to leave the
majority to their children and grandchildren (75 percent), with
other heirs receiving the second-highest percentage (14 percent).
Respondents intend to leave 12 percent of their wealth to charities
(8 percent to secular charities, and 4 percent to religious
charities).
Electing to give, and giving to elect
Twenty-four percent of wealthy individuals contributed to a
political candidate, campaign or committee last year or plan to do
so during the 2016 election season. Among this group, donors over
the age of 70 (40 percent) and LGBT individuals (38 percent) were
more likely to make such political contributions.
Among those who contributed to a political candidate or
campaign, wealthy individuals reported doing so because they:
- View it as an opportunity to exercise
their voice (56 percent).
- Hope to influence the outcome of
elections (49 percent).
- Believe their contribution can make a
difference (46 percent).
The main reasons why 76 percent of wealthy individuals have not
and do not plan to make political contributions during this
election season include:
- Feeling such contributions would have
little to no impact when compared to corporate contributions (47
percent) and contributions from political action committees (PACs)
(26 percent).
- Believing such contributions won’t make
a difference (31 percent).
- Not having a particular candidate they
would endorse (26 percent).
Results of this study are based on a survey of 1,435 U.S.
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. To view a detailed summary of key findings and to
access the full report, visit www.ustrust.com/philanthropy.
1 2013 Philanthropy Panel Study on giving in 2012, the latest
year data is available on average giving by American households
2 2013 U.S. Volunteering and Civic Engagement Study
3 Average giving amounts are calculated excluding ultra high net
worth households (those with a wealth level greater than $20
million) because our data is only able to provide an aggregate
value for giving by these households, not individual giving values.
We cannot use an aggregate value when looking at individual
characteristics.
The Indiana University Lilly Family School of PhilanthropyThe
Indiana University Lilly Family School of Philanthropy is dedicated
to improving philanthropy to improve the world by training and
empowering students and professionals to be innovators and leaders
who create positive and lasting change. The school offers a
comprehensive approach to philanthropy through its academic,
research and international programs and through The Fund Raising
School, Lake Institute on Faith & Giving, and the Women’s
Philanthropy Institute. For more information, visit
www.philanthropy.iupui.edu.
U.S. Trust’s Philanthropic Solutions GroupU.S. Trust’s
Philanthropic Solutions Group serves the needs of nonprofit
institutions, philanthropic individuals and families across the
investment businesses with Bank of America. Philanthropic Solutions
distributes more than $300 million in grants to charitable
organizations annually on behalf of clients where U.S. Trust serves
as trustee, co-trustee or grant-making agent. The investment
businesses within Bank of America, including U.S. Trust, Merrill
Lynch Wealth Management and the Merrill Lynch Private Banking and
Investment Group are among the nation's leading providers of
investment and philanthropic services to individuals, families,
foundations, endowments and other nonprofit organizations.
Bank of AmericaBank of America is one of the world's leading
financial institutions, serving individual consumers, small and
middle-market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk management products and services. The company provides
unmatched convenience in the United States, serving approximately
47 million consumer and small business relationships with
approximately 4,600 retail financial centers, approximately 16,000
ATMs, and award-winning online banking with approximately 34
million active accounts and more than 21 million mobile active
users. Bank of America is a global leader in wealth management,
corporate and investment banking and trading across a broad range
of asset classes, serving corporations, governments, institutions
and individuals around the world. Bank of America offers
industry-leading support to approximately 3 million small business
owners through a suite of innovative, easy-to-use online products
and services. The company serves clients through operations in all
50 states, the District of Columbia, the U.S. Virgin Islands,
Puerto Rico and more than 35 countries. Bank of America Corporation
stock (NYSE: BAC) is listed on the New York Stock Exchange.
Institutional Investments & Philanthropic Solutions
(“Philanthropic Solutions”) is part of U.S. Trust, Bank of America
Corporation (“U.S. Trust”). U.S. Trust operates through Bank of
America, N.A. and other subsidiaries of Bank of America Corporation
(“BofA Corp.”). Bank of America, N.A., Member FDIC. Banking and
fiduciary activities are performed by wholly owned banking
affiliates of BofA Corp., including Bank of America, N.A.
Investment products:
Are Not FDIC Insured Are Not Bank
Guaranteed May Lose Value
Visit the Bank of America newsroom for more Bank of America
news, and click here to register for news email alerts.
www.bankofamerica.com
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161025005251/en/
Reporters May Contact:Matt Card, Bank of America,
1.617.434.1388matthew.card@bankofamerica.comJulia Ehrenfeld, Bank
of America, 1.646.855.3267julia.ehrenfeld@bankofamerica.com
Bank of America (NYSE:BAC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Bank of America (NYSE:BAC)
Historical Stock Chart
From Apr 2023 to Apr 2024