Whether the result of frothy investment values, tax management or a general sense of philanthropy, the trend toward charitable giving among the rich has never been so prevalent.
The results of a study released Tuesday by U.S. Trust show that 98.4% of wealthy households donated to charity last year and that the average donation was $65,580, a 28% increase from 2011 when 95.4% of wealthy households donated to charity.
The upshot from what is the best year for giving since the first U.S. Trust Study of High Net Worth Philanthropy in 2006 is that 85% of the donors plan to give as much or more to charity over the next three-to-five years.
"This year's study, more than ever, tells us that when wealthy donors are intentional about and engaged in their giving — when they find that meaningful intersection between their ideas and ideals — they give more, are more impactful and more personally fulfilled," said Claire Costello, national philanthropic practice executive for U.S. Trust.
PLANNER NOT SURPRISED
Tyson Jon Ray, founding partner of FORM Wealth Management Group, is not at all surprised by the findings. In his financial planning practice, philanthropy is a never-ending theme.
“We spend a lot of time talking to clients about their mission, their legacy and their charity,” he said. “I've been amazed at how many people haven't thought about giving from their investment portfolio.”
Mr. Ray,
winner of this year's InvestmentNews Global Community Impact award, wrote a book last year about how financial advisers can change the world by helping clients change the world, “Your World Impact: As a Financial Advisor.”
He recalls years ago hearing his grandmother explain that she doesn't give to charity because that's already taken care of through the taxes she paid, but says that attitude is fading fast among the generations that have followed.
“The non-profit world is starting to resurface and become more meaningful,” he said, referencing a client who recently donated $100,000 to help renovate a local church.
Beyond just money, the U.S. Trust research found that the wealthy are also giving more of their time, with 75% of respondents volunteering with at least one non-profit organization. Among those who volunteered in 2013, 59% volunteered more than 100 hours, and 34% volunteered more than 200 hours.
VOLUNTEERISM STRONG
The study found that volunteerism has an increasingly strong connection to giving levels. Wealthy donors who volunteered in 2013 gave 73% more on average than those who did not volunteer ($76,572 compared to $44,137). The study also found that giving among wealthy donors who volunteer increased 23% from 2009 ($62,302) to 2013 ($76,572), on average.
In terms of where the money and time is going, 85% of the donors gave to education. Education also received the largest share of dollars (27%) among all charitable subsectors — more than giving to religious, environmental, arts, basic needs and international causes combined.
Wealthy households cited the following as their top motivators for giving: believing that their gift can make a difference (74%), personal satisfaction (73%), supporting the same causes annually (66%), giving back to the community (63%), and serving on a nonprofit organization's board or volunteering for a nonprofit (62%). Only 34% of donors cited tax advantages among their chief motivators for giving.
