Although 88 percent of affluent households reported giving in 2020, 75 percent predict that the COVID-19 pandemic will not change their giving patterns on a long-term basis — this is a key finding from the latest report authored approximately every two years by Bank of America and IUPUI. Part one of our perspective on this 123-page report covered charitable giving levels, motivations for charitable giving and volunteering, and affluent volunteerism preferences and behaviors. Top-line findings for part two include:
- Majorities of wealthy households indicated that their charitable behaviors (e.g., giving and/or volunteering) did not change as a result of the pandemic.
- When asked whether they gave in any way in response to the COVID-19 pandemic, only 47 percent of affluent donors responded affirmatively.
- Of the donors who gave to health, higher education, and arts & culture organizations in 2020, 75 percent or more made unrestricted gifts.
- Roughly equal percentages of affluent donors described themselves as novices (46.6 percent) or knowledgeable (48.4 percent) in charitable giving for the year 2020.
Background and Methodology
As we noted in part one, existing areas of report coverage included “giving patterns; perceptions; motivations; decision-making; strategies; values; traditions; volunteering; donors’ contributions to political candidates, campaigns, and committees; perspectives on ways to achieve social impact; and demographic dimensions,” while new areas covered included “a special section on affluent households’ experiences during the COVID-19 pandemic and charitable relief efforts, donors’ contributions to affinity groups and social/racial justice issues, and affluent households’ use of qualified charitable distributions.”
The report’s methodology was explained as follows:
“The study is based on a survey of 1,626 households with a net worth of $1 million or more, excluding the value of their primary home, or an annual household income of $200,000 or more. The median income of survey participants was $350,000, and the median wealth level was $2 million.”
Sections 4, 5, and 6 of the report covered giving to support COVID-19 pandemic relief efforts; information on giving to charitable sub-sectors and affinity groups; and affluent donors’ charitable giving knowledge and decision-making strategies, respectively. Let’s dive in.
Section 4: Affluent Donors’ Giving to COVID-19 Pandemic Relief Efforts
According to the Chronicle of Philanthropy, “Most affluent donors responded to the pandemic with unrestricted gifts. Roughly three-quarters reported that their contributions to health-related nonprofits and higher education were unrestricted, and more than 83 percent said they gave unrestricted donations to arts and culture groups.”
Just over a quarter of affluent donors said that in response to the COVID-19 pandemic, they’d increased their giving to support food, shelter, or other basic necessities like health and medicine. However, “majorities of wealthy households indicated that their charitable behaviors (e.g., giving and/or volunteering) did not change as a result of the pandemic” — over 65 percent, and up to nearly 83 percent, reported they had not changed common generous behaviors as a result of the pandemic. 23 percent reported they had decreased their volunteering activities as a result of the COVID-19 pandemic.
While overwhelming majorities of affluent donors reported they had not changed or had even decreased their generous behaviors in response to the pandemic, over 58 percent reported that they had “provided financial support in other ways for individuals or businesses affected by the pandemic in 2020,” such as paying for services unable to be rendered or ordering carryout from restaurants.
Ultimately, when asked whether they gave in any way in response to the COVID-19 pandemic (whether using generous behaviors like donating and volunteering, or taking actions like ordering carryout,) only 47 percent of affluent donors said yes.
The obvious follow-up question is, why? Or, to be more specific, which factors did or did not drive these affluent households to decide to change their giving in response to the COVID-19 pandemic?
The survey followed up to ask about nine different factors, including lockdowns reducing access to community, access to income, or economic flows with business or properties; COVID-19 infecting friends and family, or other people such as celebrities or public figures; and uncertainty about the spread of COVID-19 or further economic impacts. Once again, the overwhelming response was that none of these factors had driven affluent donors to change their giving — on the lower end, 63 percent reported that “social distancing/community lockdowns reducing [donors’] interaction with [their] community” had no effect on their giving. On the higher end, a surprising 86.5 percent reported that “enhanced tax benefits for charitable donations under the CARES act for charitable gifts made in 2020” had no effect on their giving. Perhaps most surprisingly, 85.1 percent of respondents said that “indirect economic impacts (e.g., lower stock values)” had no effect on their giving.
None of these nine factors drove more than 3 percent of respondents to increase their giving by “a lot,” and only one of these factors — “social distancing/community lockdowns reducing [donors’] interaction with [their] community” — drove over 10 percent of donors to increase their giving “a little.” That same factor is what drove 9.1 percent of donors to reduce giving by “a lot” and 12 percent to reduce giving by “a little.”
This finding is clear: access to community can change everything about the way supporters and donors interact with nonprofits and participate in generous behaviors. The pandemic has also reinforced something that disability advocates and activists have said for years: accessibility, especially for events and other in-person activities, cannot be an afterthought. Virtual events and virtual outreach can be a critically important way for people to take action in support of nonprofit missions and causes near to their hearts. The report found that only 30.7 percent of affluent donors had “experienced virtual outreach from the organizations [they] give to.” When asked about the channels in which they’d experienced virtual outreach:
- Over half (53.2 percent) experienced more frequent email outreach from organizations in 2020.
- Just over four in ten (43.1 percent) experienced more virtual events.
- Nearly a third (32.1 percent) experienced more frequent social media outreach.
Not only is social media a channel that received a lot of attention due to the pandemic, but many nonprofits also predict it will grow in the near future. In our recent survey about the future of nonprofit fundraising and engagement, we found that nearly 40 percent of respondents said they predicted they would see the most supporter growth in their social media channels over the next three to five years.
Many nonprofits saw a striking increase in first-time donors in 2020, and the M+R 2021 Benchmarks found that was particularly true for those whose work is directly impacted by the COVID-19 pandemic. However, when asked “how do you expect your philanthropic behavior to change in the future as a result of having experienced the coronavirus pandemic?” 75 percent of affluent donors responded that they “do not expect this to affect [their] long-term philanthropic behavior.” Many nonprofits are aware that now is the time to focus on strategies for donor retention, especially after such a busy year with new donor acquisition, so this finding is important to keep in mind when figuring out how to build connections with new donors, both for this year-end season and for years to come.
Section 5: Affluent Donors’ Giving to Charitable Sub-Sectors and Affinity Groups
The most popular cause for affluent donors’ giving in 2020 was basic needs — just over 57 percent reported directing gifts to that cause category. “Additionally,” found the report, “affluent households frequently gave to religious organizations (46.9 percent) and about a third gave to health organizations (32.1 percent.)” Those three categories were the clear leaders by cause, and between 20 and 30 percent of respondents stated they gave to the next ten most popular causes. These included Youth & Family, Animals, Combination, Disaster Relief (including COVID,) Arts & Culture, Higher Education, Other, K-12 Education, Social or Racial Justice, and Environment. The clear outlier was international causes, coming in at least popular with just over 10 percent of affluent donors supporting it in calendar year 2020.
While it wasn’t the most popular in terms of the number of gifts, the Religion category received the most dollars (over 32 percent) out of all 14 cause categories in the survey. Basic needs received nearly 20 percent of funds, higher education received nearly 10 percent, and the remaining categories received about 6 percent or less.
One new aspect of the 2020 report? Questions about social justice donations.
For the first time in 2020, respondents were asked about their giving to support social justice or racial justice causes (e.g., nonprofits or grassroots organizations with social or racial justice missions, community bail funds, marginalized groups). More than one in five (21.6 percent) of affluent households gave in this way.
In addition to explaining their giving to charitable sub-sectors, affluent individuals indicated whether they had given to an affinity cause or organization in 2020. Nearly a quarter (24.9 percent) of wealthy individuals gave to social justice causes and/or organizations. Less than one in five (17.3 percent) gave to women’s and girls’ causes and/or organizations, while 16.8 percent gave to youth causes and/or organizations.
Donors were asked whether they gave to the following “affinity causes or organizations”:
- Social justice causes and/or organizations (activism or community organizing for social issues like housing, education, public interest law for immigrant/refugee, disability, and other vulnerable populations)
- Women and girl’s causes and/or organizations
- Youth causes and/or organizations
- African American causes and/or organizations
- LGBTQ causes and/or organizations
- Hispanic/Latino causes and/or organizations
- Asian American causes and/or organizations
The lines defining (or not defining) these categories are interesting, and it’s easy to see how overlap can and does exist — as a proud partner to many social justice organizations, we know very well that housing, education, disability, and other social justice issues affect women, youth, LGBTQ people, and many different racial and immigrant communities; and these communities take action around them. Regardless, we’ll be excited to see how support for these causes develops in the future — especially because 18 percent of respondents said they’d be interested in becoming more knowledgeable about social justice causes.
The survey included more detailed data on donors who gave to women-and-girls-focused organizations and causes, as well as those who gave to organizations focused on the donors’ own ethnic group and/or country of origin. Those who gave to women and girls-focused causes were influenced by “a belief that supporting women and girls is the most effective way to solve other social problems,” as well as an eye to the future and the desire to create a better world for their children. Nearly 20 percent also cited a personal experience of gender discrimination as a driver of their giving. We know from a 2019 study by the Women’s Philanthropy Institute at IUPUI that “only 1.6 percent of philanthropic giving went to nonprofits that promote women’s and girl’s causes in 2017, the most recent year for which complete data is available,” so affluent donors’ support is more than welcome. Additionally, when asked about the intended purpose/s of their gifts, over 44 percent of donors who gave to women and girls’ causes reported that they were motivated by a desire to support reproductive health/rights. This study covers time elapsed before SB8, the recent Texas law attempting to ban abortion at 6 weeks, but affluent donors’ support of reproductive health and rights likely did not wane in the face of such extreme legislation.
The survey posed one question exclusively to first- or second-generation immigrants in the sample: “Do you give to charitable organizations that are focused on your ethnicity and/or country of origin?” Nearly 80 percent said no, nearly 18 percent said yes, and about 4 percent were unsure. We’d be interested to see if the next survey opens up this question to more of the survey sample, and also includes more questions about donors’ support for racial justice and ethnic group support overall.
Section 6: Affluent Donors’ Charitable Giving Knowledge and Decision-Making Strategies
When asked to self-evaluate their knowledgeability about charitable giving, “a sizeable share of affluent households rated themselves as either novices (46.6 percent) or knowledgeable (48.4 percent) in charitable giving for the year 2020. A smaller percentage rated themselves as experts (5.0 percent).”
These figures, says the report, “are consistent with previous findings from 2015 and 2017,” although it’s interesting to note that there was a documented 5 percent spike in “knowledgeable” donors in 2017, which then dropped back to 2015 levels in 2020. There was a corresponding 5 percent decrease in “novice” donors from 2015 to 2017, but novices regained 3 of those 5 percentage points in 2020. “Expert” donors grew by only 1 percent between 2017 and 2020. It’s possible that a small number of respondents classified themselves as novices in 2015, then as knowledgeable in 2017, only to reclassify themselves as novice donors once again in 2020 — after all, when asked about their interest in becoming more knowledgeable about a list of eleven aspects of charitable giving, nearly 22 percent of respondents said they’d like to “becom[e] more familiar with non-profit organizations and how they serve constituent needs.”
For affluent donors, higher levels of charitable giving knowledge were correlated with an increased likelihood of monitoring or evaluating their gift impact; the likelihood of using or establishing any giving vehicle (such as donor advised funds;) and donating higher gift amounts. Giving vehicle usage was up in 2020 from 2017 by just over 2 percent — and vehicles like donor advised funds are on the rise. Although only 9.2 percent of respondents said they’d contributed funds to their giving vehicle of choice in 2020, donors’ likelihood of using a giving vehicle increased by wealth level: “those households with a total net worth of less than $1 million are least likely to use or plan to use a giving vehicle (18.8 percent), compared to those households with total net worth between $1 million and $4,999,999 (34.4 percent), or between $5 million and $19,999,999 (59.1 percent).”
When asked which of four options most drove their giving decisions and/or strategies, 44.5 percent “reported that their giving decisions and strategies are driven by the type or profile of a particular organization,” followed closely by 43.6 percent who “indicated their giving was driven by issues.” To top it off, over 71 percent of affluent donors report “draw[ing] upon their values when determining which nonprofits to support financially,” but interestingly, over 55 percent said they chose based on “the recognizability or reputation of the organization.” These findings offer opportunities for nonprofits to connect with donors: by building authentic relationships with donors, educating them about your organization’s mission and work, you can create long-term connections and increase your fundraising and engagement in a holistic way.
Determining that they support your nonprofit’s mission isn’t the only factor in affluent donors’ decision to donate, however. When asked about twelve post-donation factors, those ranked as “very important” to donors included:
- “Spend only a reasonable amount of [the] donation on general administrative and fundraising expenses” (62.5 percent)
- “Not distribute [my] name to others” (59.4 percent)
- “Demonstrate sound business and operational practices including full disclosure of financial statements” (58.1 percent)
- “Honor [my] request for privacy and/or anonymity” (57.3 percent)
While the first item on this list is a good opportunity for many nonprofits to educate donors on why general administrative expenses can be very important to advancing the mission — highly-qualified staff need to be hired and retained to carry out critical work; utility bills must be paid — the remaining items on this list are straightforward action items for nonprofits. With the right platform, nonprofits can build a robust digital program guided by best practices; create beautiful fundraising reports with just a few clicks; and ensure donors’ privacy and communications preferences are honored.
While over 95 percent of affluent donors gave via cash, check, or credit card, affluent donors were very likely in 2020 to use digital platforms for giving. “For the first time, this study sought to understand which digital tools and platforms affluent individuals used to make donations.” The finding? “In 2020, the majority (56.6 percent) indicated they gave through the nonprofit’s website.” Fewer than 1 in 5 respondents said they gave through crowdfunding, payment apps like Venmo, social media tools, online donor-advised fund recommendations, or text-to-give, although a small percentage of our nonprofit survey respondents predicted they’d see growth via their SMS channel.