Posted on July 19, 2005

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Wealthy Remain Cautious Givers, Report Finds

Charitable giving staged a bit of a comeback last year, but giving by the wealthiest Americans is still dramatically lower than it was during the stock market bubble years, the Chicago Tribune reports.

According to the Spectrem Group, a Chicago-based market research and consulting firm, average donations reported by households with $5 million or more in assets, excluding primary homes, decreased by 70 percent, to $180,000 during 2002-04, compared to average donations of $600,000 for 1998-2000. The latest period included a rebound in major stock market indices and a jump in households worth more than $5 million in 2004 — Spectrem estimates that number at 740,000, an increase of 200,000 over 2003.

"A cautious attitude about giving is still prevalent," commented Spectrem managing director Catherine McBreen. "Even though their bottom line is better, people don't feel it yet. They still don't feel like they're going to recover [from the market downturn that began in 2000]." Individual giving levels also vary as large numbers of new households enter the category, McBreen added. Millionaires under age 50, for example, tend to donate time to their favorite causes, frequently reducing the amount of dollars they give.

Among the merely affluent, defined as those with at least $500,000 in non-home assets, self-reported average donations totaled $7,748, or 6 percent of income in 2004, while the super-rich, those with $25 million or more in non-home assets, gave on average nearly 8 percent of their income.

Overall, charitable giving last year rose an estimated 5 percent, to $248.5 billion, a 2.3 percent inflation-adjusted increase that was significantly above the gains of the previous few years, according to the Giving USA Foundation's annual report on philanthropy. Philanthropic experts interviewed by the Tribune said they had not noticed a drop-off in giving by a particular income group and pointed out that the average net worth of wealthy donors could be substantially lower than bubble-era days, even with more households in the category.

Spectrem's data, however, seems to correspond with a 2004 analysis of Internal Revenue Service figures by the NewTithing Group, a San Francisco-based research organization, that showed high-asset filers give less. According to the NewTithing study, if taxpayers with assets of $1.7 million to $46 million in 2001 gave at the same rate as the average American, total giving would have been 23 percent higher.

Stewart, Janet. “Richest Stay on Charity Sidelines.” Chicago Tribune 7/17/05.

Primary Subject: Philanthropy and Voluntarism

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