A recent study of ultra-high-net-worth donors found that the wealthiest individuals and those under 40 are the most generous in their giving. They also worry a lot about their charitable efforts.
SEI Private Wealth Management and Scorpio Partnership surveyed 275 individuals with average total financial assets of $18 million. Fifty-eight percent were men and 42% women, their average age was 51, and 21% were under 40. Twenty-three percent were entrepreneurs, 52% employees and 13% retired.
The youngest study participants said they gave away 27% of their wealth every year, twice the average, and those with assets of $10 million or more donated 21% of their wealth.
With generosity also comes angst. Fifty-two percent of those in the $10 million-plus bracket said their philanthropy kept them up at night with worries that they were not giving enough to make a difference or that their money was being wasted.
The less wealthy donors did not worry so much about their giving strategy and slept better, as did those older than 60. Female donors, too, got a better night’s rest than their male counterparts.
Among survey respondents who measured the results of their generosity, social impact was the number one metric. After that, family impact was the choice of the youngest and wealthiest donors, while those farther down the wealth ladder chose numeric measures specific to the cause they supported.
Forty-four percent of all respondents said they were most confident seeking advice about difficult financial decisions, including philanthropy, from wealth advisors, while 21% looked to their family and 20% relied on themselves.
The survey findings showed that 71% of respondents with less than $3 million in assets made all or most of their investment decisions on their own.
The proportion of self-directed respondents jumped to 92% among the under-40 group, while nearly half of those 60 and older used and followed the advice of professionals. Thirty-seven percent of women put their trust in wealth advisors, compared with 26% of men.
The study identified these trends in philanthropy:
- Donors are increasingly looking at nonprofits through a business lens, particularly in terms of sustainability, and this is giving rise to impact investing
- Donors are seeking both quantifiable and qualitative measurements of an organization’s effectiveness, and nonprofits in turn are finding new ways to provide essential information
- Donor-advised fund assets have shot past $70 billion, and their upward trajectory is likely to continue as donors seek convenient, flexible ways to give
- Family foundations are the giving vehicle of choice among next-generation philanthropists. Two-thirds of these now have a founder who is active in the organization, and they are striving to bring younger family members on board
— Check out Donors Increasingly Support Charities via Mobile Devices on ThinkAdvisor.