The richer a donor is, the less likely he or she is to make unrestricted gifts, a new study of the world’s wealthiest donors has found.
Nearly 70 percent of donors with $1-million to $5-million in investable assets say they prefer to give unrestricted gifts to charity, while among those with assets of $50-million or more, 45 percent say they prefer to make unrestricted gifts.
The study, conducted by Forbes magazine and Credit Suisse, polled 264 donors with investable assets of at least $1-million. Among the other findings:
- The majority of the world’s wealthiest people are putting their money into their own grant-making foundations. About 36 percent of donors with assets of more than $50-million said they contributed to their foundations, while 13 percent of those with $1-million to $5-million said they gave to foundations. The desire to support capital projects also varied by degree of wealth; 27 percent of the very richest donors supported such projects, while 18 percent of those at the lower end of the wealth scale did.
- Personal values are the strongest motivation for giving, cited by 70 percent of all the donors polled. Roughly a third or more said their religious faith, desire to establish a family legacy, or wish to help society were also strong reasons for giving.
- The wealthiest donors seek out their peers for advice. About 30 percent of those with assets of more than $50-million said they turn to other philanthropists for advice on where to give, while over all just 21 percent of affluent people seek out other donors for counsel. About 23 percent of all those polled said they ask no one for advice, while 37 percent seek out financial advisers for help.
The study was released to coincide with Forbes magazine’s publication of its annual ranking of the 400 wealthiest Americans.
The magazine commissioned the philanthropy study as part of a meeting it held in June to bring together more than 150 of the world’s richest people to discuss their charitable giving.
The study found geographical differences in the causes donors support. About 44 percent of wealthy donors in the Asia Pacific region gave the most to religious institutions, followed by 41 percent of U.S. donors and 20 percent of European donors. About 43 percent of Europeans gave to medical research, compared with slightly more than a third in Asia Pacific countries and the United States.
Even the wealthiest philanthropists say they face challenges in their giving, the greatest of which is realizing their philanthropic goals.
Part of the reason, Forbes and Credit Suisse suggested in a report that accompanied the findings, is that they set high standards for their giving.
Of those surveyed, 80 percent said the failure rate of charitable endeavors they support should not exceed 50 percent, and 90 percent of those with more than $50-million in assets said such a rate of failure would be intolerable.
Among all of the rich donors surveyed, one third were willing to wait ten to 19 years for a return on their philanthropic investments, while 44 percent expected such returns in fewer than 10 years.