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New Research Reveals Trends in Current Philanthropic Giving from Wealthy Donors

Since 2006 the U.S. Trust Study of High Net Worth Philanthropy has examined the giving and volunteering trends, behaviors, attitudes, and priorities of American households with a net worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more. The most recent installment, written and researched in partnership with the Indiana University Lilly Family School of Philanthropy, was released this past October. Here are some takeaway highlights:

Most Wealthy Households Donate: 91% of high net worth (HNW) households in this study donated to charity in the past year, a much higher rate of giving than the general population of U.S. households at 59%.

Older Donors Give to More Places: Donors over the age of 70 gave to an average of eleven organizations, baby boomers gave to seven, and donors under the age of fifty gave to five. The average among the study population was eight.

HNW Households Optimistic About Future Giving: Only 3% of wealthy donors plan to give less in the next three years, compared to 6% who intended to give less when asked in 2014, and 9% in 2012. 83% of wealthy donors surveyed were planning to give as much (55%) or more (28%) through 2018 than they have in the past.

Basic Needs Organizations Received the Widest Support: 63% of wealthy donors gave to basic needs organizations last year. A wider level of support than organizations with a focus on religion (50%), education (45%), the environment (42%), or health (40%).

However, Religious Organizations Received the Most: Despite claiming a smaller proportion of donors, religious organizations received the largest share of gifts among all charitable subsectors (36%). This is more than giving to basic needs (28%), higher education (8%), health (7%), or arts and culture (5%).

Volunteering Plays a Huge Role in Charitable Giving: 50% of wealthy individuals volunteered their time and talents to charitable organizations they care about – twice the rate of the general population at 25%. 84% of HNW donors give financially to at least some of the organizations with which they volunteer, while 49% give to most, if not all, of the organizations where they volunteer. Wealthy individuals who volunteered in 2015 gave 56% more on average than those who did not volunteer.

Donors Give For Specific Personal Reasons: The two reasons for giving chosen by the highest percentages of respondents were: That they believed in the mission of the organization (54%) and That they believed their gift could make a difference (44%). In the same line of reasoning, 89% of respondents said it was important that the nonprofit spend only a reasonable amount of their donation on general administrative and fundraising expenses rather than the mission or cause of the organization.

Finding Worthy Causes Can Be a Challenge: 67% of wealthy individuals said the greatest challenge to their charitable giving was identifying causes they cared about. Despite, or perhaps because of the wealth of options available, donors have trouble deciding where to give.

Many Donors Struggle or Neglect to Evaluate the Impact of Their Donation: 44% of respondents believed their giving was having the impact they intended, while 54% were unsure.

Family Comes First: When asked how they would like to ultimately distribute their wealth, high net worth individuals reported that they intend to leave the majority to their children and grandchildren (75%), with other heirs receiving the second highest percentage (14%), and charities receiving the third highest percentage (8%).

While the survey did not address life insurance death benefits directly, it is important to point out that the death benefit from a permanent life insurance policy may be directed by the policy holder towards individuals and charitable organizations alike, and this death benefit is not generally subject to probate or other legal entanglements. This can give individuals across a wide variety of economic conditions and financial means a way to contribute a legacy to their heirs or support causes they identify with. Given the optimistic outlook towards charitable giving described in this study, permeant life insurance may provide an attractive solution for a variety of philanthropically-minded individuals.

Contact your dedicated IFN representative today to discuss all life insurance options available for yourself and your clients. 800.921.3100.

http://www.ustrust.com/publish/content/application/pdf/GWMOL/USTp_AR6XQ8VH_oct_2017.pdf

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Disclaimer

The information contained herein is for general information purposes only. Imeriti, Inc. is not to be held responsible for the accuracy of this information. Neither Imeriti, Inc. nor its employees provide tax or legal advice. As with all matters of a tax or legal nature, your clients should consult their own tax or legal counsel for advice. Any taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax adviser.

The information, statistics, and opinions reported herein are from sources believed to be reliable. However, Imeriti and the author of this blog do not guarantee the truth, accuracy, and reliability of any source, fact and/or statistic cited and no do necessarily agree with any opinions expressed by such sources.

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