Wealthy U.S. households were steadfast in their generosity amid the pandemic last year, with 88% doling out an average of $43,195 to charity, a 48% increase from the $29,269 that was donated in 2017, according to the 2021 Bank of America "Study of Philanthropy: Charitable Giving by Affluent Households."
The study found that older individuals (90%) were more likely to give to charity in 2020 than younger individuals (81%). Also, 92% of women versus 86% of men were more likely to give to charity in 2020.
The study, a collaboration between Bank of America Private Bank and the Indiana University Lilly Family School of Philanthropy at IUPUI, was conducted in January. It included 1,626 affluent U.S. 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 findings also included insights about giving patterns, priorities and attitudes from studies conducted in 2015 and 2017.
In a politically and racially charged year intertwined with economic uncertainty, issues-based giving emerged as a driving factor for affluent donors, the study said. Forty-four percent said that issues drove their giving decisions and/or strategies in 2020, compared with 31% in 2017. This has shifted from the majority (54%), who in 2017 said their giving decisions and/or strategies were organizations-based. In 2020, 45% indicated that that organizations drove their giving decisions.
The study said that the shift from organization-based to issue-based philanthropy may be due to generational differences. Younger donors were significantly more likely (55%) to focus on issues or causes when donating, compared to older donors (40%). On the other hand, older donors (48%) were more likely to say that organizations drove their giving decisions and strategies than younger donors (34%).
Most affluent donors (78%) also linked their giving to causes they are passionate about. That represents an increase from (63%) in 2017. The top issues and causes affluent donors cited as most important to them are education (28.7%), healthcare (26.5%), climate change (20.5%), poverty/income inequality (20.1%) and animal rights (18.3%). The report noted that poverty/income inequality has risen in importance, while the economy has fallen out of the top five since 2017.
Social justice and racial justice issues sparked giving in 2020, with nearly a quarter of affluent individuals giving to organizations supporting these causes. The study noted that 11% of affluent households chose social justice as one of their top three cause/issue areas, and 19% indicated they wanted to become more knowledgeable about supporting racial equity or social justice through charitable giving.
Affluent donors also showed a growing interest in sustainable/impact investing. The number of households participating in such investing nearly doubled to 13% in 2020 versus 7% in 2017. Further, 59% of these donors said their impact investing was in addition to their existing charitable giving, and 5% said that impact investing was in lieu of all other charitable giving.
“Charitable activities last year and into this year reflect unwavering commitments by philanthropists to give in good times and bad, and to address societal issues as well as challenges faced in their local communities,” Katy Knox, president of Bank of America Private Bank, said in a statement. “We’re also seeing a next generation of change-makers beginning to transform how giving gets done and philanthropy’s role in society.”
The use of digital tools for charitable giving gained popularity among affluent donors. The study found that more than half (57%) of donors gave through a nonprofit’s website in 2020, nearly one in five (18%) used GoFundMe and other crowdfunding platforms, and 17% used payment processing apps such as Zelle and Venmo. Additionally, the study noted that 13% of donors used social media fundraising tools for giving and 7% also used online donor-advised fund recommendations.