What’s New in Charitable Giving
Every other year for the last 18 years, Bank of America and Indiana University team up to publish a study on the charitable giving statistics from affluent households. In September of 2023, their latest findings were published. Some of the interesting hypotheses regarding the 2023 study revolved around COVID-19=s effect on charitable giving. This blog entry will highlight some of the interesting findings from this recent study.
The study defined affluent households as having an annual income over $350,000 and a net worth of about $2,000,000. There were 1,626 families who participated in the survey, which was taken during the first quarter of 2023. Other than the ability to volunteer, COVID-19 was found to have very little effect on charitable giving.
Overall, charitable giving among this group was down 3% from 2022 vs 2020. The primary cause of this slide was families citing more funds needed to take care of family needs. However, volunteering for charitable causes was up 7% from 2022 vs. 2020. This is likely due to COVID related challenges in 2020. However, the overall number of families volunteering was 37%, compared to 48% from a 2017/2018 study. An interesting point was that people who volunteer at a charity typically give four times more than non-volunteers.
As to what charities families are donating to, religious organizations still top the list in dollars donated. Charities that support basic needs came in a distant second by dollar amount and giving to healthcare or for medical research was third. Giving by household (ignoring donation amount) was still focused on basic needs by 51% of the survey respondents, whereas religious organizations received donations from only 40% of respondents. Giving to religious organizations was more prevalent in the southern United States and less prevalent in the western United States. A significant portion of the study, at 29% of all families, also donated to support relief efforts related to the war in Ukraine.
Respondents were asked to choose what issues are most important to them. Education, religious life, and healthcare were the top choices. On the opposite end, transportation infrastructure workplace development, and disability rights received the least amount of support. Almost 78% of the donations were considered local by respondents, compared to only 14% that was considered international.
As to giving methods, 96% of the respondents stated that they made donations via cash or cash equivalent. About 5% of respondents had established a donor advised fund to manage their charitable giving. Of the respondents, 6% made donations using a qualified distribution from an IRA. Almost 3% of respondents stated they gave from a private foundation.
The study also highlighted the issues between the younger and older generations. Older generations were more likely to focus their charitable giving on religion, disaster relief, veterans, and aging. The younger generations tended to focus on climate change and education.
If anyone would like a copy of the complete findings from the survey, please reach out to any member of Revis, Hervas & Goldberg to request such.
