Average giving to charities by wealthy Americans increased 48% last year from 2017 ($ 43,195 vs. $ 29,269), according to Bank of America 2021 study on philanthropy: charitable giving by wealthy households. Amid pandemic challenges, nearly 90% of affluent households gave to charity in 2020, comparable to previous years. At the same time, the study found notable changes in the way donors give between different generations, which has important implications for philanthropists and the nonprofit sector going forward.
“The charitable activities of the past year and this year reflect the unwavering commitment of philanthropists to give in good times and in bad times, and to tackle societal issues as well as challenges in their local communities. Said Katy Knox, president of Bank of America Private Bank. “We are also seeing a next generation of change makers begin to transform the way donations are made and the role of philanthropy in society. “
The study, a collaboration between Bank of America Private Bank and the Lilly Family School of Philanthropy at Indiana University at IUPUI, is based on a survey of 1,626 affluent American households on their donations in 2020. The results are based on information on giving patterns, priorities and attitudes from studies conducted in 2015 and 2017, as part of a research collaboration that began in 2006.
The main results show:
- Issue-based philanthropy is becoming increasingly important. The rich are almost as likely to base their decisions to give on issues (44%) as they are on organizations (45%). This is a change from previous studies in this series in which a clear majority of affluent households indicated that organizations were at the origin of their donation decisions and / or strategies. Among donors aged 38 and under, 55% say they focus more on the issues or causes they consider most important than on organizations (34%).
- Social and racial justice issues have generated interest and support. One in five affluent households (22%) supported social and racial justice causes by giving. Eleven percent said social justice was one of their three most important causes / issues, and 19% wanted to know more about this area, indicating potential for growth.
- Participation in sustainable / impact investments has almost doubled. The number of high net worth donors participating in sustainable / impact investing increased to 13% in 2020 from 7% in 2017. Additionally, 59% of these donors said their sustainable investment was in addition to their charitable giving. existing. Only 5% of donors said impact investing replaced all other charitable giving.
- Direct digital donations are growing in popularity. Almost three in five donors (57%) gave through a nonprofit organization’s website in 2020. Almost one in five (18%) used digital tools such as GoFundMe and other platforms crowdfunding, and 17% used payment processing apps such as Zelle and Venmo. Younger and diverse donors were more likely than others to use these channels to give, for example, 74% of Asian Americans gave through a nonprofit organization’s website, and 31% of Blacks / African Americans used a payment processing application.
- Younger and more diverse donors are embracing structured giving vehicles. In 2020, younger donors, aged 38 or under, were more than two and a half times more likely than older donors to have donated to a donation vehicle (18% vs. 7%), such as funds advised by donors, charities, trusts and private foundations. The use of donation vehicles was also popular among Black / African American (21%) and Hispanic / Latino (16%) donors.
- Wealthy people who volunteer give twice as much as those who do not. Although fewer people volunteered last year due to the pandemic, high net worth donors who volunteered on average gave more than double the amount to charity than those who did not volunteer. .
- Knowledge of charitable giving is positively associated with other factors related to giving. Donors who report being knowledgeable (48%) or expert (5%) about giving are more likely to monitor the impact of their donations, report that they are having the intended impact, and use donation vehicles. donations. Conversely, more than half of all wealthy donors do not have a strategy for their donations (56%) and / or a donation budget (55%). The main challenges facing donors are:
- Identify what interests them and decide where to donate (40%)
- Understand how much they can afford to give (32%)
- Monitor their donations to ensure they are having the impact they want (24%)
- Seventy-two percent say their charitable donations would remain the same, even without tax deductions. When asked if they had not received any income tax deductions for charitable donations, would their household charitable donations increase, decrease or stay the same, 72% answered “stay the same”, 6% answered “increase” and 22% answered “decrease”.
“Innovative forms of giving are embraced by a diverse population of donors whose influence, expectations and priorities expand traditional notions of philanthropy,” said Una Osili, Ph.D., Efroymson Chair in Philanthropy, Professor of Philanthropy. economics and philanthropic studies and associate dean. for research and international programs at the Lilly Family School of Philanthropy at Indiana University. “Financially empowered and technologically empowered, these high net worth donors seek to deepen their impact, using a range of tools and vehicles at their disposal to advance the issues they are passionate about. “
The main charities supported were broadly in line with those of previous years. The most supported types of charities were those providing basic needs (contributed by 57% of wealthy households), religious institutions (47%) and health care organizations (32%). The highest aggregate amounts went to organizations focused on religion (32% of dollars donated), basic needs (20%) and education (16%, combining Kindergarten to Grade 12 and Higher Education).
Nonprofits generate the most trust among donors to solve societal or global issues, with nearly nine in 10 placing the most trust in nonprofits. However, other institutions are developing. The confidence of wealthy individuals has greatly increased in the ability of small and medium-sized enterprises and branches of government to solve societal or global problems. Government institutions have seen substantial jumps, notably the president and the executive branch (60%, against 46%); the Supreme Court and the federal judiciary (60%, versus 53%); and Congress (52%, against 40%).
In a year significantly disrupted by the pandemic, nearly half (47%) of affluent Americans made donations to charities or financially supported individuals or businesses in direct response to the pandemic. In addition, 93% of households maintained or increased their donations to frontline organizations providing basic needs, health care and medicines. Read more results of studies specific to the pandemic.
The Bank of America Philanthropy Study 2021: Charitable Giving from Affluent Households is the latest in a series of studies that have set the benchmark for research into the donation practices of affluent households in the United States.
Bank of America and Indiana University’s Lilly Family School of Philanthropy partnered to develop the survey. The survey was conducted using data obtained by Ipsos, including responses from its KnowledgePanel®, a nationally representative probability panel offering highly accurate and representative samples for online research. Ipsos engaged with the online panel, administered the survey, and analyzed the responses to verify the validity of the data. The Lilly Family School of Philanthropy analyzed the responses to verify the validity of the data and generated the statistical results, with the analysis of the survey results being a joint effort between the partners.
The survey was conducted in January 2021 and focused on charitable giving in 2020. It is based on a nationally representative random sample of 1,626 wealthy households and includes in-depth analysis based on age, gender , race and gender identity. Households in the study have a net worth of $ 1 million or more (excluding the value of their primary residence) and / or annual family income of $ 200,000 or more. The average income and wealth levels of the study respondents were approximately $ 523,472 and $ 31.1 million, respectively, the median income and wealth levels of the study respondents were approximately 350,000 $ and $ 2.0 million, respectively, and the average age of respondents was 52.5 years.