The well-to-do increased their donations to charity last year and turned to new kinds of causes, while sticking to some proven favorites.
Wealthy households donated an average of $ 43,195 in 2020, according to a recently released Bank of America BAC Wealthy Charitable Giving Survey,
and the Lilly Family School of Philanthropy at Indiana University. This is nearly 48% more than in 2017, the last time the survey was conducted, when affluent households donated an average of $ 29,269.
By comparison, donor households in the general population donated an average of $ 2,581 in 2018, the latest year for which aggregate donation data is available. The median amount of donations from affluent households rose to $ 3,000 in 2020 from $ 2,150 in 2017. The median amount of donations for all households was $ 850 in 2018.
In other words, “in 2020, on average, the total amount given to charities by affluent donors was 17.5 times greater than the amount given to charities by donors from the general population (in 2018),” said noted the researchers.
The Bank of America and Lilly Family School survey was conducted in January 2021 and looked at charitable giving in 2020. Households surveyed had a net worth of at least $ 1 million (excluding the value of their primary residence) and / or annual household income. of $ 200,000 or more.
âThe charitable activities of the past year and this year reflect the unwavering commitment of philanthropists to give in good times and in bad times, and to tackle societal issues as well as challenges faced in their local communities. Said Katy Knox, president of Bank of America Private Bank. .
The favorite causes of wealthy donors
Wealthy donors were the most likely to donate to charities involved in basic needs (like helping people with food and shelter), religion and health, according to the study. This was also the case in previous versions of the survey, the authors noted.
However, there is a gap between which groups wealthy donors are most likely to donate to and which groups receive the largest share of wealthy donor dollars. Charities involved in religion, basic needs, and education (both K-12 and higher education) got the most funding from wealthy donors.
âCharities with basic needs were supported by the largest proportion of affluent households; However, in 2020, faith-based organizations received the largest share of dollars donated by affluent donors (32%), with only 20% of affluent dollars going to basic needs organizations, âthe authors wrote.
Wealthy donors were more interested in racial justice than in previous years
Last year’s pandemic and calls for racial justice changed the way wealthy donors gave. They focused on giving in their own communities, and support for racial and social justice causes became more important to wealthy households, according to the survey.
The share of affluent households who reported making donations to support “Black / African American causes and / or organizations” increased in 2020 to 11.4%, from 6.5% in 2017. Affluent households were more likely in 2020 (8.7%) to say supporting social and racial justice was important than they were in 2017 (5.8%).
“In 2020, on average, the total amount given to charities by affluent donors was 17.5 times greater than the amount given to charities by donors in the general population (in 2018).“
Wealthy people said the public policy issues that mattered to them most – whether or not donating to organizations working on these issues – were education, healthcare, climate change, poverty / income inequality and animal rights.
This generally matches the 2017 results, “the only difference being that poverty / income inequality has increased in importance, while the economy has moved out of the top 5 since 2017,” the authors said.
Why the donation choices of the rich matter
One reason to pay attention to the donation preferences of wealthy Americans: Although they represent only a small portion of the population, wealthier households have an “extremely disproportionate impact on charitable giving”, accounting for roughly the two. third of household donations in the United States, the report’s authors noted in their first draft of the study in 2006.
Lilly researchers did not have an updated version of this statistic immediately available, but more recent research suggests that the wealthiest households continue to dominate charitable giving in the United States.
According to a separate study by the Lilly Family School of Philanthropy on trends in long-term giving, households with higher incomes, more wealth and a higher level of education were more likely to give in 2018 than their less affluent and less educated counterparts. Almost eight in ten households with wealth levels of $ 200,000 or more have given to charity; while fewer than four in ten households with wealth levels of $ 50,000 or less did so.
Although the country as a whole gave a record amount to charity in 2020, there is another disturbing trend parallel to this: The share of people in the United States who donate to charity has declined over the past decade. over the past two decades, and just under half (49.6%) of the population gave in 2018, according to the Long-Term Giving Study. In 2000, 66.2% of people in the United States made a donation.
See also: More people donated money to racial justice causes in 2020, but some Americans donated more than others