The rich are no longer happy to simply give money to charity – instead they are volunteering more and becoming strategic in their philanthropic donations.
That’s according to the 2012 Bank of America Study of High Net Worth Philanthropy, carried out by the Center on Philanthropy at Indiana University. It found that 95% of wealthy Americans donated to at least one charity last year, similar to previous years.
But there has been a huge increase in the percentage of wealthy individuals volunteering their time or skills to non-profits. Almost nine in 10 did this in 2011, up 10 percentage points on 2009.
“During the past decade, we have seen donors become increasingly impact driven and strategic in their charitable activities,” said Una Osili, professor of economics and philanthropic studies and director of research for the Center on Philanthropy at Indiana University.
“They are more focused, more engaged through volunteerism, and their commitment is strongest when they are personally involved with the non-profits to which they give.”
Seven in 10 of those surveyed said they had a strategy in place to guide their charitable giving, while 26% of wealthy donors had a private foundation or donor-advised fund. A further 5% planned to set up one in the next few years.
Just under 55% volunteered for more than 100 hours last year, while 35% gave 200 hours or more to philanthropic causes. The most common activities included sitting on the board of directors of a non-profit, event planning and fundraising.
The study also found that the more time the rich spent volunteering, the more they donated – those who volunteered more than 100 hours gave about $78,000 (€60,300) on average, around twice that of those who volunteered fewer than 100 hours.
According to the research, donations increased when people believed the organisation had a large impact.
In cases where the rich both volunteered and believed the donation would have a big affect, the average gift grew by 40% between 2009 and 2011 to $102,642.
However, the study also found the average amount given by high net worth individuals – defined as those worth at least $1 million or with an annual household income of $200,000 – decreased between 2009 and 2011, from $56,621 to $52,770, taking into account inflation.
Eight in 10 wealthy households gave to educational non-profits last year, with basic needs (79%), arts (69%), health (65%) and religious (65%) causes also proving popular.
The wealthiest 3% accounted for about half of the donations made by individual Americans last year.