Americans donate billions of dollars to charitable organizations every year, particularly in the November-December giving period.
In a recent survey, 64% of donors said they would like to give more, but were held back by concerns about personal finances and impact.
The survey results, released Thursday by Fidelity Charitable, a donor-advised fund sponsor, showed that 72% of respondents cited financial circumstances as their main obstacle to giving more, and 65% said the chief barrier was concern about the effect of their giving.
Ninety-five percent of donors surveyed said they would give more under the right circumstances.
The report was based on a 2016 survey conducted by Artemis Strategy Group, an independent research firm, among 3,254 adults in the U.S. who donated to nonprofits and claimed itemized charitable tax deductions on their 2015 tax returns.
What would prompt donors to give more?
Forty-seven percent of respondents said the ability to take a larger tax deduction would be a huge incentive to increase their giving.
Fidelity Charitable noted, however, that these donors were probably not availing themselves of all the tax deductions already available that could allow them to give more.
Only 41% of respondents said they paid close attention to giving-related tax deductions. This means that 59% of donors likely were not taking advantage of significant tax breaks related to giving.
The report pointed to other evidence of the tax knowledge gap in a separate Fidelity Charitable study of people who give to charity, in which 80% of respondents said they had appreciated stock in their portfolio, but only 21% had ever used this as a charitable contribution. Doing so could allow donors to give up to 20% more to charity, the report said.
“Of course, every household will have a limit on what they can give — however, we believe that there are many ways that people can create ‘found money’ for giving in their budgets,” Matt Nash, senior vice president of donor engagement at Fidelity Charitable, said in a statement. “If people simply took advantage of the full tax benefits of giving or established automated, reoccurring gifts, for example, we think a donor would get closer to reaching their giving goals.”
With the Dec. 31 tax deadline imminent, now may be the right time for charitably minded investors to donate appreciated securities, rather than cash, and make a difference.
Fidelity Charitable’s research showed that concerns about impact was the other big factor that kept 81% of donors from giving more. Two-thirds cited unease about determining an organization’s credibility or trustworthiness.
In addition, 48% worried that their donations would not be put to good use, and another 48% expressed frustrations that some charities did not always explain how a donation would be used.
Still, 65% of donors said having greater insight into how their contributions would benefit causes they were asked to support — or simply information about the nonprofit’s needs — would influence them to give more.
Fidelity Charitable said it would provide a free webinar on Nov. 14 at noon for those interested in learning how to give more and make their giving more effective.
The webinar anticipates Giving Tuesday, Nov. 28, one of the biggest single charitable days of the year. In 2016, $168 million was raised for nonprofits on that day, according to Fidelity Charitable.
— Check out 7 Steps to Crafting a Philanthropic Mission Your Clients Will Love on ThinkAdvisor.