Posted on November 10, 2010

Wealthiest Americans Continue to Support Nonprofits but at Lower Levels, Study Finds

High-net-worth households in the United States continued to support charitable organizations in 2009 at levels consistent with those seen in 2005 and 2007, a new study from Bank of America Merrill Lynch finds.

Based on a biennial survey conducted by the Center on Philanthropy at Indiana University of more than eight hundred American households with income greater than $200,000 and/or a net worth of at least $1 million, the 2010 Study of High-Net-Worth Philanthropy (75 pages, PDF) found that 98 percent of such households donated to charitable causes in 2009, while 66 percent reported a strong commitment to supporting the same organizations or charitable causes year after year. While the survey also found that 35 percent of respondents stopped giving to at least one organization in 2009, that was consistent with results from the 2007 survey.

According to the survey, the commitment to support nonprofits remained high among high-net-worth households in 2009, though many appeared to be making trade-offs, with the average gift amount falling by an inflation-adjusted 35 percent. And while the study found that health and education remain among the top areas of interest supported by wealthy households, the average gift amount in those areas declined.

The survey also found that more than 55 percent of high-net-worth donors made their largest gift in 2009 to fund general operations, while significantly fewer households made their largest gift to support the growth of an organization (24 percent), a capital campaign (14 percent), or the long-term needs of an organization (11 percent).

"As the economy recovers and donors begin to look beyond short-term needs, nonprofit organizations will need to consider adjusting their messaging to better capture the critical support needed for sustainability and growth," said Claire Costello, national foundation executive at Bank of America Merrill Lynch. "Their challenge will be striking a balance between successfully engaging donors around both long- and short-term needs."