High Net-Worth Household Giving Jimmie R. Alford, LL.D., LH.D. Founder and Chair, The Alford Group

Percentage of High Net Worth Households Who Gave to Any Charity, 2005 – 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Average Amount Given by High Net Worth Donor Households, 2007 and 2009   2009 Average Giving 2011 Average Giving Percent Difference Total $56,621 $52,770 -6.8% Religious $10,467 $10,144 -3.1% Secular $49,111 $46,216 -5.9% Education $13,374 $18,798 40.6% International $4,808 $5,831 21.3% Basic Needs $3,101 $3,643 17.5% Health $4,728 $5,102 7.9% Giving Vehicle $79,526 $77,150 -3.0% Youth/Family Services $8,009 $7,125 -11.0% Environment/Animal Care $3,574 $2,718 -24.0% Combination $5,493 $4,087 -25.6% Other $6,633 $4,810 -27.5% Arts $5,798 $3,952 -31.8% Values adjusted for inflation to 2011 dollars. Combined organizations include United Way, United Jewish Appeal, or Catholic Charities. 'Giving Vehicle' represents gifts to private foundations, charitable trusts, and donor-advised funds Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Strong Commitment to Giving Nearly $300 billion given away in 2011 More than 70% was given by individuals, of which roughly half was given by the wealthiest 3% of American households. Among wealthy households, average giving held steady at approximately 9% between 2009 and 2011. Between 2007 and 2009, giving as percentage of household income declined 2%. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Wealthy Donor Charitable Giving Forecast for the Next 3-5 Years Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Volunteerism on the Rise Generally, high net worth individuals who volunteer tend to also give financial gifts, and those who volunteer more tend to give more. Last year, those who volunteered more than 100 hours gave more than $78,000 on average, roughly twice the average gift among those who volunteered fewer than 100 hours, which was approximately $39,000. Increasingly, high net worth individuals are giving their contributions to organizations where they both volunteer and believe their gift will have the largest impact. Average gifts to these organizations grew 40% between 2009 and 2011 (from $73,301 to $102,642). Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Volunteerism on the Rise The most common volunteer activities for high net worth individuals last year: Serving on a nonprofit board of directors 61% Event planning 48% Fundraising activities 48% Providing financial services (business/marketing) 40% 67% of wealthy donors reported that they give more to organizations where they serve on a board or are in an oversight role. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Volunteerism on the Rise 43% volunteer because they feel passionate about the cause supported by the organization and therefore approached them about opportunities to get involved 31% indicated that it was the organization that approached them to volunteer. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Percentage of High Net Worth Individuals Who Volunteered in 2007, 2009, 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Distribution of Hours Volunteered by High Net Worth Individuals, 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Percentage of Hours High Net Worth Individuals Volunteered, 2007, 2009, 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Donors Give Strategically The majority of wealthy donors gives strategically and has a plan for their giving 71% had a specific strategy in place to guide their charitable giving last year 61% had a budget set aside for their philanthropic activities 81% of donors apply a certain level of focus to their charitable activity, giving to organizations based on geography or a specific cause or issue. 16% give with no particular focus to a large number of organizations. 5% have a formal mission statement to guide their giving Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Donors Give Strategically 19% using giving vehicles in 2011, up from 16% in 2009. On average, the dollar amount given to these vehicles was greater than average giving to any specific nonprofit subsector last year. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Donors Give Strategically 26% of wealthy donors reported having a private foundation or donor-advised fund 5% planned to establish one during the next three years 18% have an endowment fund with a particular organization 16% use a charitable remainder trust Among all giving vehicles, the 43% of wealthy donors still primarily utilize charitable provisions in a will Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Donors Give Strategically 40% of wealthy donors consulted at least one type of outside advisor about their charitable giving in 2011. Among those donors who sought advice from at least one source last year, most consulted accountants (53%), followed by financial or wealth advisors (37%) and nonprofit personnel (33%). Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

High Net Worth Households Who Consulted Others When Making Charitable Giving Decisions by Type of Person Consulted Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Giving Distribution and Objectives In 2011, the greatest percentages of high net worth households gave to: Educational 80% Basic Need 79% Arts 69% Health 65% Religious 65% Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Giving Distribution and Objectives The three areas receiving the largest proportion of gift dollars from wealthy donors last year were: Education 28% Giving Vehicles 23% Religious Organizations 13% These three areas received the largest proportion of gift dollars in 2009 as well. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Giving Distribution and Objectives The average dollar amount gifted per high net worth household declined 7% between 2009 and 2011, from $56,621 to $52,770 (adjusted for inflation). Consistent with their funding priorities from 2009, largest gifts went to the following objectives: general operations 61% particular program or activity 30% organizational expansion/ innovation 21% Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Distribution of High Net Worth Giving by Subsector, 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Giving Distribution and Objectives Respondents were asked whether the allocation of their contributions to fund nonprofits’ general operations and specific programs changed between 2010 and 2011 in light of the economic environment. Compared to 2010, 32% of high net worth households gave more to fund the general operations of an organization in 2011. 30% of wealthy donors gave more in 2011 to fund special programs than they did in 2010. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

What Motivates High Net Worth Households to Give? Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Tax Motivations 32% of donors cited tax advantages among their chief motivators for giving. 50% reported that they would maintain their current charitable giving levels even if income tax deductions for donations were eliminated. 95% would maintain or increase their bequest giving even if tax deductions for estate giving were permanently eliminated. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Change in Estate Plans if the Estate Tax were Permanently Eliminated, 2005, 2007, 2009, 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Giving Motivations 78% of wealthy donors enjoy a sense of fulfillment based on their philanthropic engagement (giving or volunteering). 75% gain satisfaction from the impact their charitable activities have on the people and world around them. 76% feel a sense of accomplishment when these activities produce positive results . 18% feel the need for visibility or recognition based on these activities. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Ranking of Motivations for Giving to Charity, 2007, 2009, 2011 "On a scale of 1 to 5, do you usually give because of [or to]…?" 2007 2009 2011 % Rank Moved at How a Gift Can Make a Difference 66.9% 3 72.4% 1 74.0% Feeling Financially Secure 65.3% 4 71.2% 2 70.8% Support same Organizations/Causes Annually 70.7% 65.9% 68.5% Giving to an Efficient Organization N/A 71.0% 68.2% Give Back to the Community 81.2% 64.7% 5 62.0% Volunteer for the Organization 51.9% 7 53.4% 6 Political/Philosophical Beliefs 58.5% 52.1% 48.8% Remedy Issues Affecting Me Personally 57.5% 43.8% 9 41.7% 8 Religious Beliefs 51.0% 38.8% 10 40.3% Give Spontaneously to Support a Need 47.1% 39.8% Tax Benefit 31.7% 11 Set Example for Young People 45.6% 27.1% 12 28.3% Being Asked* 48.1% 31.1% 23.0% 13 Further Legacy of Others 18.2% 19.7% 19.8% 14 Other (e.g., social norms) 19.6% 10.3% 15 Business Interests 5.3% 4.9% 3.9% 16 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

How Donors Gave… And How They Plan to Give Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Factors Ranked as Important to High Net Worth Donors When Making a Charitable Gift, 2011 Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Donor Expectations and Why They Stop Giving In 2011, 30% of wealthy donors stopped giving to at least one nonprofit organization they previously supported, among which 27% stopped giving to one organization and 32% stopped giving to two. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Reasons Why a High Net Worth Household Stopped Supporting an Organization They Previously Supported Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Family Traditions and Preparing the Next Generation Many high net worth households have family traditions around giving (41%), such as volunteering as a family and giving to charity during the holidays. 26% of wealthy donors cited the joy they derive from engaging with family around charitable activities among the benefits of giving. 43% make more charitable contributions during the “giving season” than during the rest of the year 44% spread their giving evenly throughout the year Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Family Traditions and Preparing the Next Generation 33% of high net worth donors who have children involve them and other younger relatives in their household’s charitable giving activities. The 2012 study found that a family’s personal efforts and those of their network of friends or peers continue to be the leading sources by which children, grandchildren and other younger relatives learn about charitable giving (51%), followed by religious organizations (34%) and nonprofits themselves (21%). Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Family Traditions and Preparing the Next Generation Given the unprecedented intergenerational transfer of wealth in the coming years, advisors to the wealthy also have a significant opportunity to guide the current and next generation of philanthropists. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Family Traditions and Preparing the Next Generation Respondents from 46% of high net worth households reported that they make decisions about their giving jointly with their spouse or partner – even when deciding where to give their largest gift (48%). This is consistent with decision making about the broader management of their wealth, with 48% citing that wealth management decisions are made jointly. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Societal issues facing America and confidence in those working to address them Among the leading societal and public policy issues that matter most to wealthy donors today are education (60%) and health care (45%), followed by the economy (38%), poverty (34%) and the federal deficit (33%). Our 2012 study found that nearly one-third (29%) of wealthy donors changed their giving priorities last year in response to the economic downturn. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Percentage of High Net Worth Individuals' Confidence in Groups to Solve Societal or Global Problems Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

Political Giving 51% of high net worth donors gave to political causes in 2011 for the purpose of electing or defeating a candidate. According to an earlier American National Election Study 13% of the general population makes political contributions. Source: The 2012 Study of High Net Worth Philanthropy/ Bank of America 2012

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