Family philanthropy is a key driver of social change and a great way for high-net-worth families to clarify their values, commit to a mission and work collaboratively across generations to build and protect their legacies.

We recently analyzed the grant-making activities of more than 1,000 private foundations over the past 24 months to understand how and where wealthy families are focusing their giving. Our findings provide a benchmark for affluent philanthropists and the advisors who support them.

Here are five interesting discoveries about high-net-worth donors:

• They don’t just give the minimum. If you think affluent families only use their foundations to park assets and get tax benefits, think again. While foundations are required to give away 5% of their assets every year, those in our research sample gave away an average of 7.4%—a trend that has been constant in the 12 years we’ve conducted this analysis. Even more impressive, the smaller foundations, or those with less than $1 million in assets, were the biggest heroes in 2020. They gave an average of 15% of their assets.

• They’re increasingly generous. The foundations we studied collectively funded approximately 1,000 more grants and dispersed $15 million more in 2020 than in 2019, an average of $339,032 per foundation. They also doubled their grants to individuals. It’s a unique quality of private foundations that donors can issue emergency funding directly to people in need instead of granting to a public charity.

• They will answer the call. Judging from their actions in 2020, foundation donors move swiftly to help in times of urgent need. After the United States declared a national emergency in March 2020 due to Covid-19, foundations nearly doubled their year-over-year grant volume in April from 5.6% to 9.7% of total activity. They also increased their giving to human services and public/societal benefits charities, which experienced the highest year-over-year increases of all the charitable sectors tracked. And the dollars that donors granted to charity exceeded the funds they invested in their foundations for only the second time in 20 years (the first being in 2019), demonstrating donors’ commitment to philanthropy in times of heightened need.

• They're loosening the reins on how their dollars are spent. Typically, philanthropists carefully define how they want their foundation dollars to be used by issuing “specific-purpose” grants. However, as they endeavored to meet the onslaught of urgent need in 2020, they eased their restrictions and gave more “general-purpose” grants, which gave charities the maximum flexibility in how they used the funding. These general-purpose grants represented 46% of the awards in 2020. That’s the most balanced split we’ve seen between general and specific awards since 2010, when the general-purpose grants represented just 32%.

• Their resources are growing. Foundation endowments experienced double-digit growth in both 2020 and 2019. That helped fund the 2020 grant increase and set the stage for future giving. Part of the growth was fueled by investment returns (roughly 55% of endowment assets are allocated to equities). There were also new contributions from funders who replenished an average of 57 cents for every 83 cents they disbursed in grants and expenses—a sure sign of ongoing charitable intent.

Despite the headlines given to megadonors like the Gates Foundation and the Ford Foundation, 98% of the roughly 100,000 private foundations in the U.S. have endowments of less than $50 million and 63% have less than $1 million. Great work is being fueled by people out of the spotlight who are quietly and persistently pursuing their philanthropic missions and effecting change.      

Hannah Shaw Grove has spent three decades studying and working with high-net-worth families, family offices and their closest advisors on achieving their wealth management priorities. She is the chief marketing officer at Foundation Source, the nation’s largest provider of support services to private foundations. The firm works in partnership with financial and legal advisors as well as directly with individuals and families.