The Commons

Forget the futures market. Turn off Bloomberg. Hold off on those put and call orders.  You’ve got a report to read, first.

The 2008 Study of High Net Worth Philanthropy – researched and written by staff at The Center on Philanthropy at Indiana University, with sponsorship by Bank of America – suggests that the nation’s high income households were fully aware of the slowing economy even in 2007, and adjusted their giving accordingly.  The study contains the responses from nearly 700 individuals with an average net worth of $12.6 million.

Economists now say that the recession began in December 2007, and overall individual giving decreased 2.6 percent from 2005 to 2007, adjusted for inflation.  IRS and Bank of America data indicates that charitable giving by high income households declined 9.7 percent in this same period.  Interestingly, the majority of high income households increased their giving over this period – with the exception of  households with $5 million or more in income. It’s these households that bring down the average giving number for this period. What did they know that we didn’t – and how did they know it?

Other key findings from the report:

•    Volunteering and Board service are closely linked with higher levels of giving.
•    Educational institutions received the highest average donation of any type of institution.
•    “Giving back” is cited as the most compelling reason to give.
•    Donors believe that giving is personally fulfilling (“in tough times, giving is heroic.” )
•    Respondents believe philanthropic modeling is an important part of child raising.
•    Regular attendees at religious services give more than non-attendees.
•    More than anything else, people expect nonprofits to operate on sound business principles.

In future blogs, we’ll drill deeper into the data and try to offer some additional insights from our experience.  In the meantime,  you may want to dig into it yourself.

Tags: charitable giving, economic downturn, nonprofit marketing, trends