New philanthropic donors slightly outnumbered repeat donors in 2021, as charitable donations returned to pre-pandemic levels, according to BNY Mellon Wealth Management.
The BNY Mellon Wealth Management 2022 Annual Charitable Gift Report showed that new donors accounted for 51% of the donations made in 2021 compared to 49% for returning donors. In addition, new donors’ gifts were on average 18.5% larger than returning donors. The report reflects giving through the BNY Mellon Charitable Gift Fund, a donor advised fund.
“When donors have access to the right information and advice, they are able to explore more charitable options to achieve their philanthropic goals,” BNY Mellon Wealth Management said. “Wealth advisors provide significant guidance when it comes to donors' philanthropy.”
The annual report showed that charitable giving started to rebound in 2021 after declining in 2020, with the number of gifts increasing by 10%, the total dollar amount of gifts increasing by 27%, and the average gift size also increasing by 15%.
“Charitable gift activity overall returned to historical, pre-pandemic trends as many nonprofits found ways to pivot and discover new approaches to build support for their missions and connect with donors,” BNY Mellon said.
Gifts of more than $100,000 represented 29% of the total contracts in 2021 but accounted for 85% of the total gift dollars. Gifts between $10,000 and $50,000 accounted for 54% of gifts made through BNY Mellon Wealth Management’s donor advised fund, which was the same as in 2020. Cash gifts represented 83% of the total, which also was the same as the previous year, the report said.
Giving to healthcare organizations increased the most, while giving to faith-based and religious organizations declined the most. At the same time, there was a 33% increase in year-over-year trust activity, but total trust gift amounts decreased and the dollar amount of additions to trusts decreased by 50%.
Although there was a slight uptick in the number of new trusts in 2021, trust activity continued its relatively flat to downward trend, which has been in place since the 2008 to 2009 recession. Donors seem to be looking to make a more immediate impact with their giving than what trusts provide, Crystal Thompkins, head of philanthropic solutions at BNY Mellon Wealth Management, said in the report. However, trusts are still a giving strategy that can provide solutions to both tax and estate planning needs and philanthropic goals, especially as part of a comprehensive giving strategy, she added.
Grants distributed through the BNY Mellon Charitable Gift Fund experienced a record-level gift activity in 2021, with an increase in the number of grants of 93%, and a gift amount increase of 55%, according to the report.
"The financial markets held strong in 2021 and the planned giving activity demonstrated how sustainable the giving increase in 2020 was. Even with the present market uncertainty, people do not stop giving," Thompkins said in a statement. "With the majority of planned gifts still being funded with cash, it's important (for advisors and charities) to focus on conversations about appreciated assets and ownership. There are significant opportunities for nonprofits to optimize giving by working with donors to consider non-cash gifts and craft unique gift solutions."