2014 U.S. Trust Study of High Net Worth Individuals

Encouraging news on high net worth individuals from the ongoing U.S. Trust /  Indiana University Lilly Family School of Philanthropy Survey.  Giving is up!  The overall findings seem to once again support several essential best practices, such as:  volunteers give more than non-volunteers; the more involved and engaged individuals are the larger their investment; and other essential factors supporting good stewardship and building a respectful relationship with the donor.

Here is a link to the summary of key findings

Here is a link to the full report

28 Percent Increase in Charitable Contribution

2014 U.S. Trust Study of High Net Worth Philanthropy Finds 28 Percent Increase in Charitable Contribution

Among wealthy households, the average amount given to charity last year increased 28 percent, according to the 2014 U.S. Trust® Study of High Net Worth Philanthropy. Through an ongoing partnership with the Indiana University Lilly Family School of Philanthropy, the fifth in this series of biennial studies reveals a strong commitment to charitable causes among high net worth households. This positive trend is seen in several findings, including:

  • Last year, virtually all (98.4 percent) high net worth households donated to charity, compared to 95.4 percent in 2011. This marks the highest rate of high net worth participation in charitable giving since the study began in 2006. This high rate of giving among the wealthy compares with 65 percent of the U.S. general population who donate to charity.
  • The average dollar amount given to charity by wealthy donors increased 28 percent, from $53,519 in 2011 to $68,580 in 2013. Average giving as a percentage of household income decreased by one percentage point, as increases in income levels slightly outpaced increases in giving levels among this demographic.
  • Eighty-five percent of wealthy donors plan to give as much (50 percent) or more (35 percent) in the next three to five years (through 2018) than they have in the past – up from 76 percent who said they planned to give as much (52 percent) or more (24 percent) when asked in 2012. The top reasons cited by those who plan to increase their giving are “increased financial capacity” (85 percent) and the “perceived need of the nonprofits or causes” they support (48 percent).

» Download the 2014 Study of High Net Worth Philanthropy Infographic

“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.

This research series is the most comprehensive and longest-running of its kind, and an important barometer for wealthy donors’ charitable engagement and viewpoints. The latest study offers valuable insights that help inform the strategies of nonprofit professionals, wealthy donors and charitable advisors alike.

The following are key findings from the 2014 study, which reveal significant shifts as well as consistent trends in the giving behaviors, priorities and strategies of the wealthy, including: the nonprofit subsectors they support, what motivates them to give, why they stop giving, how they give, and family traditions. The study also examines the relationships among wealthy donors’ knowledge of and engagement with giving, how much they give, and the personal fulfillment they enjoy from philanthropy.

Volunteers give more

Volunteerism among high net worth individuals remained strong last year, with 75 percent of respondents volunteering with at least one nonprofit organization. Among those who volunteered in 2013, 59 percent volunteered more than 100 hours; 34 percent volunteered more than 200 hours.

The study found that volunteerism has a strong connection to giving levels, and increasingly so. Wealthy donors who volunteered in 2013 gave 73 percent 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 percent from 2009 ($62,302) to 2013 ($76,572), on average.

Education sector captures hearts and wallets

Many nonprofit subsectors enjoyed increased contributions from wealthy donors last year. However, findings demonstrate that the education sector was biggest winner, including:

• Eighty-five percent of wealthy donors gave to education in 2013 – making it the charitable subsector supported by the largest percentage of high net worth households. A closer look reveals that 73 percent gave to higher education and 60 percent gave to K-12 education.
• Education also received the largest share of dollars (27 percent) among all charitable subsectors – more than giving to religious, environmental, arts, basic needs and international causes combined.
• The highest percentage of wealthy households directed their largest gifts to religious organizations (34 percent) and educational causes (27 percent) – including higher education (19 percent) and K-12 (8 percent).

Why the wealthy give, and stop giving

A variety of motivations drive high net worth philanthropy. In 2013, wealthy households cited the following as their top motivators for giving:  believing that their gift can make a difference (74 percent), personal satisfaction (73 percent), supporting the same causes annually (66 percent), giving back to the community (63 percent), and serving on a nonprofit organization’s board or volunteering for a nonprofit (62 percent). Only one-third (34 percent) of donors cited tax advantages among their chief motivators for giving.

Wealthy donors have strong feelings about how the nonprofits they support should use their contributions and conduct themselves. For instance, the majority of these donors (81 percent) expect the nonprofits they support to spend an appropriate amount of their donation on general administration and fundraising, and to demonstrate sound business and operational practices (80 percent). They also expect nonprofits to honor their request for privacy and anonymity (78 percent) and, similarly, to not distribute their name to others (74 percent).

When donors stopped giving to a particular charity they previously supported, the top reasons cited were because they received too frequent solicitation or the nonprofit organization asked for an inappropriate amount (42 percent), the donor personally changed philanthropic focus or decided to support other causes (35 percent), the organization was not effective (18 percent) and the nonprofit organization they supported changed leadership or activities (16 percent).

“Nonprofit organizations that understand what savvy donors value and expect, carefully steward their gifts, and demonstrate that they are making a meaningful difference through wise and transparent use of resources can develop enduring partnerships with donors that achieve a shared vision,” said Patrick Rooney, Ph.D., associate dean for academic affairs and research at the Indiana University Lilly School of Philanthropy.

Donors give strategically

The majority of wealthy donors (73 percent) have a specific strategy in place to guide their charitable giving. This is further evidenced by the fact that 93 percent of donors apply a certain level of focus to their charitable activity, giving to a targeted set of organizations based on geography or a specific cause or issue.

More than half (57 percent) of wealthy donors used a giving vehicle in 2013, or plan to establish one to achieve their charitable goals going forward. Other trends in the use of giving vehicles – such as private foundations, donor-advised funds and charitable trusts – include:

  • Giving vehicles received a large share of charitable dollars (28 percent) in 2013 when compared to giving directly to charitable subsectors such as the environment, arts, etc.,, up from 23 percent in 2011.
  • Wealthy donors are favoring donor-advised funds, with 16 percent of respondents giving to a donor-advised fund in 2013, 8 percent to a private foundation, and just 4 percent to charitable trust.
  • Households with a net worth of less than $1 million are less likely to have or plan to use a giving vehicle (31 percent) compared to those households with net worth between $1 – 5 million (51 percent) and $5 million or greater (69 percent).
  • Beyond donations and the use of giving vehicles, 84 percent of wealthy donors are aware of innovative ways to use their assets to advance social or charitable goals, such as socially responsible investing, social impact bonds or mission-related investing. Despite this high level of awareness, only 13 percent currently use such approaches.

Knowledgeable and engaged donors give more and achieve greater fulfillment

The study found strong relationships between wealthy donors’ knowledge of giving and their characteristics and behaviors, including how they monitor their giving and its impact, consult with advisors, leverage giving vehicles, and achieve personal fulfillment from philanthropic pursuits. For instance:

  • Respondents who rated themselves as “expert” (14 percent) when it comes to charitable giving gave a significantly higher amount to charity in 2013 ($150,229), compared to those who describe themselves as “knowledgeable” (72 percent, $64,599) or “novice” (14 percent, $19,013).
  • Slightly more than half of wealthy donors monitor or evaluate the impact of their charitable giving (53 percent). Among those who monitor the impact of their charitable giving, 29 percent are novice, 53 percent are knowledgeable and 78 percent are expert donors. Those who monitor their giving donate a much higher amount ($104,265) than those who do not monitor ($28,543).
  • Knowledgeable and expert givers are also more likely to derive greater personal fulfillment from their charitable giving – and greater fulfillment leads to higher giving levels. In 2013, 73 percent of wealthy donors reported achieving personal fulfillment through their charitable giving. Those who report personal fulfillment donated more than five times the amount of those who were not fulfilled (roughly $80,500 compared to $15,100).

Family traditions and preparing the next generation

When it comes to decision-making, 61 percent of respondents who are married or are living with a partner reported that they make decisions about their giving jointly with their spouse or partner.

Many wealthy families have giving traditions (41 percent), such as volunteering as a family and giving to charity during the holidays. Among those who volunteer (75 percent), respondents were far more likely to do so with family (68 percent) or friends (68 percent) than they were to do so through a workplace campaign (25 percent) or some other organized group (49 percent).

With regard to the transmittance of philanthropic values, the study found that a family’s personal efforts and those of their friends and peers continue to be the leading sources by which the next generation learn about giving (55 percent), followed by religious organizations (44 percent) and nonprofits (24 percent).

Societal issues and confidence in those working to address them

Consistent with their top giving priority, more than half (56 percent) of wealthy donors also prioritize education among policy issues most important to them – followed by poverty (35 percent), health care (34 percent), and the environment (28 percent).

The study also found that, regardless of government funding of nonprofits, most wealthy donors would remain loyal to the organizations that have already won their support. In fact, in the event government decreased funding for an organization that a wealthy household currently supports, nearly one-third (32 percent) of respondents would increase their charitable contributions.

When it comes to resolving domestic and global issues, wealthy donors express the most confidence in nonprofit organizations (92 percent) and individuals (91 percent). Fewer – and in many cases far fewer – have faith in the federal government (54 percent), state or local government (61 percent), Congress (25 percent), large corporations (58 percent) and religious institutions’ (73 percent) ability to do so.

1 The Center on Philanthropy Panel Study, 2009, Indiana University


The purpose of the 2014 U.S. Trust Study of High Net Worth Philanthropy is to provide comprehensive information on the charitable giving and volunteering activities of high net worth households. Conducted between April 2014 and September 2014, the study consisted of mail and web surveys randomly distributed to 20,000 households in high net worth areas of the United States. The fifth in this series of studies builds on those completed in 2006, 2008, 2010 and 2012 and was once again written and researched in partnership with the Indiana University Lilly Family School of Philanthropy. Results are based on a nationwide sample of 632 U.S. households with a net worth of $1 million or more (excluding the value of their home) and/or an annual household income of $200,000 or more.

– See more at: http://www.philanthropy.iupui.edu/news/article/2014-us-trust-study-of-high-net-worth-philanthropy#sthash.bNPjh51R.dpuf