The 2010 Bank of America High Net Worth Philanthropy Study was released yesterday. This is the third biennial study which has been conducted since 2006.
The headlines most reported about the study are similar to what the “Chronicle of Philanthropy” posited:
“Donations By the Wealthy Dropped Sharply in the Recession, Study Finds“
And yes, the study found that the charitable gifts from those donors making at least $200,000+ annually and/or having $1,000,000 in liquid assets declined almost 35% from 2007 to 2009.
So, wealthy people gave less during the Great Recession. Ok. I can understand that finding (although it’s not clear how this jibes with the 2010 GivingUSA Foundation study which found giving from all individuals was flat from 2008 to 2009 when adjusted for inflation. The wealthy make up almost 70% of all individual giving, so one would suspect a decrease in this number as well). But regardless, the degree of giving decline isn’t the most interesting nor important finding of the study.
For development folk, this study has much more insightful information. Here are my top 5 take aways from the 2010 BOA study:
1. 67% of the couples in the survey reported conferring about charitable gifts. 41% of the couples reported conferring and making all charitable gift decisions together. Take away? Include the spouse/significant other from cultivation through solicitation to stewardship – always.
2. 68% of these wealthy donors discuss their giving intentions with their accountants and 39% do so with their financial/wealth advisors. These numbers represent a continuing increase in the influence of professional advisors on charitable giving decisions. Take away? Are you identifying, cultivating, and building relationships with the accountants, trust officers, estate attorneys, financial advisors, and others in your communities who have increasing influence over the giving decisions of their clients?
3. 59% of these wealthy donors cited, “Too frequent solicitations/organization asked for an inappropriate amount” as the number one reason they stopped supporting a particular organization during the last year. Take away? As Una Osili, director of research at the Indiana University Center on Philanthropy stated, “What this means is that more than ever, nonprofits should be careful to tailor their level of requests, know their donors, and engage them at the right level.” Knowing your donors remains the best strategy, regardless of economic circumstance.
4. More than 55% of these donors gave their largest gift in 2009 to support operations of the organization. Only 14% made their largest gifts to capital projects. Take away? Your annual fund does not have to viewed as a “black hole.” Donors who care about what you do and believe you are making a difference in the lives of those you serve will support the operations of your institution.
5. When asked what most motivated these donors to make a gift, 72% stated they believed their gift would make a difference. Take away? Wealthy donors will give because you meet needs, not because you have them.
Surprisingly to many younger donors give about as much as older donors. According to a recent study by at the Center on Philanthropy at Indiana University donors across all generations give roughly the same amount to charity even when controlled for factors such as income education and religiosity. The researchers suggest that younger people are more likely to respond positively to messages that focus on the global impact of an organization s work while older donors are more likely to give to groups that highlight services they provide that the government does not.