A study on philanthropy trends by US Trust and a university suggests tax changes haven't greatly affected charitable contributions.
Wealthy US householders contributed more to charity in 2017 than two years ago and women lead philanthropic engagement and impact investing, according to a report delving into this sector. Recent major tax changes also appear not to have hit the urge to donate.
Average giving amounts given by HNW households rose by 15 per cent to $29,269 compared with two years ago, while the percentage of households who give remained high at 90 per cent, according to a recent study by US Trust in partnership with Indiana University Lilly Family School of Philanthropy. Results of this study are based on a survey of 1,646 US 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.
Some 93 per cent of HNW women gave to charity last year and 56 per cent of them volunteered their efforts, with 6 per cent participating in the new and evolving field of impact investing. Another finding shedding light on the prominent role of women was that 23 per cent of women surveyed serve on the board of a non-profit organization. One-quarter of HNW women donors support causes or organizations aimed at benefitting women and girls, and said that their number one motivation for this giving is their belief that it is the most efficient way to solve societal problems.
The 2018 US Trust Study of High Net Worth Philanthropy said it throws light on the motivations among HNW individuals for giving, suggesting that broader social, cultural and even political trends, such as awareness of women’s rights, environmental impact and the need for more accountability in business and politics are driving change. For example, one finding showed that a quarter of HNW donors gave to disaster relief efforts, motivated by media coverage of the devastation and lack of confidence in government relief efforts.
The study adds to others suggesting that, possibly as a result of recent buoyant markets and other factors, philanthropic activity remains strong in North America. A recent study by Foundation Source, for example, showed robust payout levels.
Different priorities stand out among age groups. Millennials are less likely to give (84 percent) than older generations (90 per cent), yet they are more likely to participate in impact investing (16 per cent). Among Hispanic respondents, the volunteering rate was 60 per cent, the highest level found among any demographic.
As far as “making a difference” is concerned, when asked to rank seven types of philanthropic activity which have the potential to have the greatest impact, charitable giving and volunteering were ranked as first and second on the list. But some donors are not clear about what happens with their contributions: 54 per cent of HNW donors do not know if their giving has the impact they intended. This suggests that non-profit organizations must do a better job of explaining how they get results.
The report also said that last December’s tax changes by the Trump administration, such as the doubling of estate tax exemptions, had not appeared to dent charitable giving (based on the premise that some donations are made to mitigate tax bills). The majority of wealthy donors said that they expect to maintain (84 percent) or increase (4 per cent) the amount they give to charity in 2018 under the new federal tax law. There remains debate on what might be the longer term impact of such tax changes. Susan Winer, an expert on philanthropy and regular commentator for Family Wealth Report, has given views here.
Just 17 per cent of wealthy donors said they are always motivated to give due to tax benefits. An additional 51 per cent said that tax benefits sometimes motivate their giving.