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October 31, 2012 at 09:22 AM
Last year, individual Americans gave more than 70% of the nearly $300 billion donated to charity, and about half that amount came from the wealthiest 3% of households, according a new study.
The 2012 Bank of America Study of High-Net-Worth Philanthropy, released Monday, found that average giving as a percentage of household income held steady at about 9% between 2009 and 2011.
The study, the fourth in a biennial series conducted in conjunction with the Center on Philanthropy at Indiana University, showed that 95% of high-net-worth households donated to at least one charity, compared with 65% of all U.S. households that donated to charity.
In addition, 89% of wealthy individuals volunteered their time and talent to nonprofits in 2011, up 10 percentage points from 2009.
The study for the first time asked wealthy donors to forecast their giving in coming years. Seventy-six percent said they planned to give as much as or more three to five years hence than they had in the past; only 9% said they would give less.
The 2012 study revealed both major shifts and consistent trends in the attitudes and giving priorities of wealthy donors.
Engagement boosts giving
Last year, the study found, 54% of wealthy individuals volunteered more than 100 hours, and 35% volunteered more than 200 hours. Generally speaking, the more they volunteered the more they gave.
The most common volunteer activity in 2011 was serving on a nonprofit’s board of directors (61%), followed by event planning and fundraising activities (both 48%). Meanwhile, 40% provided professional services to the nonprofits they supported.
The study found that wealthy individuals were increasingly contributing to organizations where they both volunteered and believed their gift would have the largest effect. In instances where both were true, the average gift to these organizations grew by 40% between 2009 and 2011.
Strategic giving
The majority of wealthy donors’ charitable giving was guided by a specific strategy, according to the study. Eighty-one percent of donors in the study gave to a targeted set of organizations based on geography or a specific cause or issue, compared with 16% who gave with no particular focus to a large number of organizations.
Charitable provisions in a will continued to be the most common giving vehicle (43%), but the use of other vehicles was on the rise. Twenty-six percent of respondents reported having a private foundation or donor-advised fund, and another 5% planned to establish one during the next few years.
Forty percent of wealthy donors consulted with an outside advisor about their charitable giving last year, most often their accountant (53%), followed by their financial or wealth advisors (37%) and nonprofit personnel (33%). The lucky nonprofit sectors
In 2011, 80% of high-net-worth households gave to educational and 79% to basic needs organizations. These were followed by arts (69%), health (65%) and religious (65%) organizations.
