With 2017 being a record-breaking year for giving—over $410 billion was donated to charitable causes—it’s helpful to understand how wealth relates to giving.
In its Annual Report on Philanthropy for 2017, Giving USA provides some valuable insights into the interplay between wealth and giving. For instance, America’s richest individuals experienced a substantial increase in wealth last year and giving by wealthy individuals also rose significantly. Millennials and mid-level donors continue to be important constituents to understand. Read on for more details.
The Wealthy Got Wealthier in 2017
America’s 400 wealthiest individuals (Forbes 400) saw their net worth grow to $2.7 trillion in 2017, compared to $2.4 trillion in 2016. This group includes:
- 22 newcomers: 14 self-made entrepreneurs and 3 immigrants.
- 50 women, down from 51 in 2016.
- 14 younger individuals (under the age of 40).
The Generous Increased Their Giving
The 50 most generous donors in America (Philanthropy 50) gave a combined total of $14.7 billion to charity in 2017, up from $5.6 billion in 2016. Most of these contributions (62%) went to foundations. Of these 50 donors, 17 are on the Forbes 400 list and donated the lion’s share—$10.3 billion in 2017. About 60% of the Philanthropy 50 donors derived their wealth from technology and donated $8.7 billion.
In the past, spikes in giving by the Philanthropy 50 were due to bequests or the extreme generosity of a single donor. By contrast, last year’s giving increase was fueled by several younger donors. Most likely, these donors will keep giving as they continue to build their fortunes.
In another study of the top 800 wealthiest individuals in America:
- 74% reported donating to charity.
- 69% reported volunteering in charitable organizations.
- 24% reported serving on nonprofit boards.
Millennials Take an Integrated Approach
Compared to previous generations, wealthy Millennials tend to take a more holistic approach to contributing to society. While less likely to make direct financial donations, they tend to seek careers that support causes they’re passionate about and are more interested in impact investing as a way to effect change.
Mid-Level Donors Remain Important
While big numbers and wealthy individuals make headlines, mid-level donors are also vital players in the nonprofit world. Indeed, America’s 50 most generous individuals only contributed 3.5% of last years’ record-breaking $410.02 billion in charitable donations. To appeal to mid-level donors, nonprofits can:
- Dedicate staff time to reaching out to these donors.
- Designate a specific purpose for mid-level donors’ collective giving.
- Create opportunities to earn “insider” status.
- Nurture relationships with these donors, not just solicit contributions from them.
Wealth, Giving and Nonprofits
What are your insights into the relationship between wealth and giving? Have you seen a change in the demographics of your donors? How are you reaching out to mid-level donors? What is your experience with the Millennial generation? Do you have an End of Year or Capital Campaign plan in place? Please share your thoughts in the comments below. We’d love to hear from you.