Wealthy households continued to support charitable organizations at levels consistent with those seen in 2005 and 2007, according to the 2010 Bank of America Merrill Lynch Study of High Net Worth Philanthropy released Tuesday. Ninety-eight percent of affluent households donated to charitable causes in 2009, the study said.
The 2010 study, which was conducted by the Center on Philanthropy at Indiana University for Bank of America Merrill Lynch, followed studies published through the partnership in 2006 and 2008. It is the result of random mailings to 20,000 U.S. households in high-net-worth neighborhoods across the country about their giving in 2009.
More than 800 households with income greater than $200,000 and/or net worth of at least $1 million, responded. The average wealth of respondents was $10.7 million; half of those who responded had a net worth between $3 million and $20 million.
In a telephone interview, Claire Costello, national foundation executive for philanthropic management at Bank of America Merrill Lynch, noted some particularly interesting findings in the study. For one, donors continue to show loyalty and support for the nonprofit sector in that they did not stop giving to any more organizations than they had stopped giving to in 2007. “Even if they were giving at lower dollar amounts, they continued to see their nonprofits through,” Costello said.
In addition, nonprofits experienced a significant uptick in volunteerism, which also speaks to support of the sector, she said. The researchers have several hypotheses to explain this finding:
- People are feeling constrained in terms of dollars, and can make up for that in other ways.
- Baby boomers with still a lot to offer are retiring at increasing rates.
- There are more unemployed or underemployed, people with many skills who are seeing fit to participate in the nonprofit sector in the absence of a private sector job.
Costello said the Bureau of Labor recently increased the worth of a volunteer hour by 50 cents, to $20.85, meaning that billions of dollars go into the nonprofit sector.
For the first time, researchers asked respondents where they put their greatest confidence as between business, state and local government, themselves and the nonprofit sector. They voted fairly strongly for placing their confidence in the nonprofit sector and themselves in solving local and global issues, Costello said. “That’s a huge endorsement, and speaks to the level of responsibility that high-net-worth donors perceive of themselves and the confidence they place in the expertise and good works of the nonprofit sector.”
Another first-time question related to investment risk with respect to donors’ philanthropic versus personal assets. The results showed that donors are more risk averse in their philanthropic investments than they are with their personal investments. Costello said this evidences sophistication on the part of donors that they are aware of the ethical responsibilities that giving brings.