Review of Charitable Giving by Affluent Households – Part 2

What is this Report?

The 2023 Bank of America Study of Philanthropy report is the 9^th biennial examination about philanthropic attitudes, priorities, and more for affluent US households in 2022. It is written as a collaboration between Bank of America and the Indiana University Lilly Family School of Philanthropy. It is based on 1,623 wealthy US households, defined as either a net worth $1M+ or annual household income of $200K+. The average mean income was $523,472 and average mean wealth of $31M.

The report was full of so much valuable information, we decided to split it into two blog posts.

What are key findings from the Report?

• Over forty percent of respondents found their spouse or partner to be the most valuable source of information for charitable decision making. Next is the nonprofit to whom you give at 29.9% and none of the above at 28.9%. Family members come in at 28.9%.

• Almost 70% of affluent donors choose their organization or cause based on their personal values or beliefs. Over 60% choose to direct their donations to an organization based on their interest in the issue area and over 51% decide based on the name and reputation of the nonprofit. Interestingly, 48.8% gave because they know someone who personally benefited from the organization.

• Of the affluent household respondents that stopped giving to at least one charity in 2022, 28.2% said that stopped supporting an organization in 2022 that they had previously supported was due to too many requests from the nonprofit or too many requests close together. The second biggest reason to stop giving was the respondent found another organization that they felt better achieved their philanthropic goals (25.8%). The third was because something changed in the household, whether a job change/loss, a move, etc. (21.9%).

• The majority of affluent household respondents gave to nonprofits via cash/check/credit card (96.1%). Over 45.5% of respondents gave clothing, food, and household items. Other categories were under 5% including publicly traded securities (3.6%), art/collectables/other historical items (2.3%), vehicles (1.9%), Other (1.8%), Cryptocurrency (0.8%), Closely held securities (0.5%) and real estate (0.4%).

• Over 80% of affluent household respondents said that they give directly from their personal assets and income. Over 10.3% gave from donor advised funds, followed by 3.5% from family foundations; 3.0% from other giving vehicles and 2.2% from charitable trusts.

• Over 79% of affluent households do not involve other generations in their giving. Over 16%  do involve their children, grandchildren and others. Interestingly, the majority of affluent households plan to leave their wealth to children or grandchildren; the smallest percentage went to charities (8.4% secular charities and 3.8% to religious charities.)

What can I do as a result?

• Make sure to include both partners in philanthropic discussions. The data shows time and time again that many people make decisions jointly. In this study, people highly value their spouse/partner’s information for philanthropy.

• Be mindful of how much your organization is asking for donations. There’s evidence of significant donor fatigue and you don’t want to ruin the relationship from too many solicitations.

• Ask for non-cash gifts. While the survey shows that most affluent households give from their income and personal assets, the larger gifts come from wealth, not income.

• Consider how you can help affluent households bring younger generations into the fold. In UBS’s 4^th annual global family office report, it found in the survey that 63% of the family office’s purpose to help with generational transfer of wealth. However, only 42% have a succession plan in place. While the report focuses on wealth, not necessarily philanthropy, bringing in family members may help bridge that gap.

Additional Resources

• The 2023 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households l Bank of America/ Lilly Family School of Philanthropy, Indiana University 2023
• Review of Charitable Giving by Affluent Households Part 1 l Aspire Research Group 2023
• Family Opportunities: UBS Global Family Office Report 2023 l Aspire Research Group 2023
• Giving USA 2023 Report Insights l BWF 2023
• Review of Fidelity Charitable Giving Report 2023 l Aspire Research Group 2023