Slightly more than half of wealthy people who give to charity -- and most do -- do not have a giving plan or budget in place, according to a recent study by U.S. Trust.
This gap in formal planning opens up opportunities for financial advisors and for nonprofits, according to “The 2018 U.S. Trust Study of High Net Worth Philanthropy,” which reports on giving trends for 2017.
Almost all wealthy individuals and families (90 percent) give to charities, but only 49 percent have a written philanthropic strategy and only 48 percent have a budget. Financial advisors and charities often can suggest ways to maximize the impact of giving, U.S. Trust said.
The average amount given annually increased to nearly $30,000 from $25,500 in 2015, the last time the study was conducted. The study, which was published by the Lilly Family School of Philanthropy at the University of Indiana, included 1,646 people with an income of at least $200,000 and assets of at least $1 million.
According to U.S. Trust, women and minorities are more likely to give than the population of wealthy people as a whole. Ninety-three percent of high-net-worth women and 92 percent of high-net-worth African Americans contribute to charity, compared with 90 percent of the overall category.
Some of that giving may be fueled by the fact that 83 percent of the survey participants said they have more confidence in the nonprofit community to solve society’s problems than they do in government or the public sector.
Wealthy donors spread their generosity to an average of eight different nonprofit organizations in 2017. These donations supported a wide range of charitable causes with basic needs organizations receiving support from the largest percentage (54 percent) of high net worth households.
Other causes supported by wealthy donors included religion (49 percent), health care or medical research (36 percent), education (36 percent) and youth or family services (29 percent).
In addition to giving money, 48 percent of wealthy individuals volunteered their time as well.
Wealthy donors expect their money to be handled well. The vast majority (91 percent) said it is very important or somewhat important that the organizations they support demonstrate sound business and operational practices and 90 percent said it is important the charities spend only a reasonable amount on general administrative and fundraising expenses.