Rich donors gave an average of $34,917 to charity last year, a 19 percent increase from pre-pandemic levels and 13.5 times more than the average amount given to charity by the general population, according to a new study of charitable giving by wealthy households.
The study also found that 85 percent of high-net-worth households gave to charity in 2022. While that is just a 3 percent drop from 2020, it is about 35 percentage points more than the share of nonwealthy households that gave last year.
“This means that, for better or worse, in order to achieve their fundraising goals, nonprofits in many cases need to approach this narrower group of affluent people,” says William Jarvis, managing director and philanthropic executive at Bank of America Private Bank. “The traditional idea of a mass campaign for fundraising may not be as effective as it was in the past.”
The 2023 “Bank of America Study of Philanthropy: Charitable Giving by Affluent Households” surveyed 1,626 wealthy U.S. respondents who have a net worth of at least $1 million, excluding their primary residence, or an annual household income of $200,000 or more. It was produced by the Indiana University Lilly Family School of Philanthropy at IUPUI in partnership with Bank of America.
Basic needs topped the list of causes that affluent donors supported in 2022, with half of respondents giving to social-service organizations. Thirty-nine percent donated to religious groups, while 30 percent supported health care or medical research. Twenty-eight percent gave to nonprofits that benefit youths.
The survey asked an additional question about what other causes wealthy donors supported last year and found that 29 percent gave to relief efforts related to the war in Ukraine.
The study found that 36 percent of the charitable dollars wealthy donors gave last year went to religious groups. But the overall share of rich households giving to such organizations was 39 percent in 2022, down from 47 percent in 2020. Jarvis says the ongoing decline in giving to religion, which has been building for years, could negatively affect other important causes.
“In 2015, we had about half of these households giving to a religious organization, and it’s been steadily downhill, a 10 percentage point decline,” Jarvis says. He points out that houses of worship and other religious organizations often provide food, clothing, and shelter to people in need. The drop in giving “may mean those religious organizations are less able to provide those basic-needs services because they’re not being supported as much as they had been in the past.”
‘They Don’t Want to Only Write a Check’
The study found that wealthy women continue to be an important force in charitable giving. Women make 85 percent of charitable-giving decisions in affluent households, the study found. In addition, 42 percent of women respondents said they volunteered at a charity last year, compared with 33 percent of men respondents. While more rich women volunteer than rich men, only 16 percent of those women served on a nonprofit board, compared with 30 percent of men.
There is no clear answer why that is the case, but charities would do well to better utilize the skills of their women volunteers, says Una Osili, associate dean for research and international programs at Indiana University Lilly Family School of Philanthropy at IUPUI.
“Nonprofits historically have not provided those opportunities for women, especially at the leadership level, so then the question becomes what can organizations do to address this disparity?” Osili says. “The good news is that many organizations have started highlighting the importance of bringing women to the leadership table and the difference that women can make when they’re part of the board membership.”
While volunteering has not returned to pre-pandemic levels, 37 percent of affluent respondents volunteered in 2022 compared with 30 percent in 2020. Ninety-four percent of respondents who volunteered also gave to charity, compared with 80 percent who did not volunteer. And volunteers give nearly four times as much to charity as those who do not volunteer.
“Volunteering is the gateway to stewardship,” Jarvis says. “Donors come in and see what the organization is doing, they learn more about it, they become more knowledgeable, and then they feel confident enough to write a check.”
Elizabeth Elting, a wealthy philanthropist who co-founded TransPerfect, a global translation and language-services company, says she started as a volunteer and ended up serving on the boards of a number of nonprofits she supports regularly. She gave one of those organizations, the New York University Stern School of Business, $5 million in 2019 to establish a fellowship program to support 40 female MBA students and back 20 women-led businesses.
“What I myself found and what I’m hearing from other philanthropists is they don’t want to only write a check,” Elting says. “They want to give their expertise. They feel they’ve worked hard for their money, they’ve learned a lot along the way, and they have a lot offer.”
Women like Elting have long been an influence in big giving, but now another group of moneyed donors are beginning to flex their giving muscle. The study found that 80 percent of wealthy millennial and Gen Z households — people under the age of 42 — gave to charity last year, and 27 percent of those younger donors reported having a giving strategy.
And what is most important to these donors? Climate change. Younger donors are twice as likely as older donors to say climate change is most important to them. Like many rich donors today, wealthy millennial and Gen Z givers want to see the inner workings of how charities operate and carry out their missions, they want to visit the group, and, in general, want access to more information, say both Osili and Jarvis.
“Younger donors are especially skeptical of nonprofits’ claims of virtue, and they want to see what’s going on,” Jarvis says. “They want to see transparency, and that means more than just looking at a 990.”
