The bank, in conjunction with a school of philanthropy at Indiana University, has delved into the habits, concerns and donation patterns of affluent Americans.

A US study of 1,626 wealthy households found that their giving to charitable causes surged by an average of 48 per cent compared with 2017, suggesting that the pandemic has jolted people to dig deeper into their pockets.

Average giving to charities by affluent Americans stood at $43,195 vs $29,269 in 2017, according to the 2021 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households. The study, conducted in January this year, was among households with a net worth of $1.0 million or more. The average income and wealth levels of study respondents were approximately $523,472 and $31.1 million respectively. Median income and wealth levels of study respondents were approximately $350,000 and $2.0 million, respectively, and respondents’ average age was 52.5 years. 

“Charitable activities last year and into this year reflect unwavering commitments by philanthropists to give in good times and bad, and to address societal issues as well as challenges faced in their local communities,” Katy Knox, president of Bank of America Private Bank, said. “We’re also seeing a next generation of change-makers beginning to transform how giving gets done and philanthropy’s role in society.”

The affluent are nearly as likely to base their giving decisions on causes (44 per cent) as they are on organizations (45 per cent). This is a departure from previous studies in this series in which clear majorities of affluent households indicated that organizations drove their giving decisions and/or strategies. Among donors ages 38 and younger, 55 per cent say they are more focused on the causes they consider most important than on organizations (34 per cent).

One in five (22 per cent) of affluent households supported social and racial justice causes through their giving. Eleven per cent said that social justice was one of their top three most important cause/issue areas, and 19 per cent wanted to know more about this area, indicating potential room for growth.

Participation in sustainable/impact investing nearly doubled. The number of affluent donors who participate in sustainable/impact investing grew to 13 per cent in 2020 vs 7 per cent in 2017. Additionally, 59 per cent of these donors said that their sustainable investing was in addition to their existing charitable giving. Just 5 per cent of donors said that impact investing was in lieu of all other charitable giving.

Digital donations
Direct digital giving is growing in popularity. Some 57 per cent of donors gave via a non-profit’s website in 2020. Almost one in five (18 per cent) used digital tools such as GoFundMe and other crowdfunding platforms, and 17 per cent used payment processing apps such as Zelle and Venmo. 

Younger, diverse donors embrace structured giving vehicles. In 2020, younger donors, aged 38 or younger, were more than two and a half times as likely as older donors to have made a donation to a giving vehicle (18 per cent vs 7 per cent), such as donor-advised funds, charitable trusts and private foundations. Use of giving vehicles was also popular among Black/African American (21 per cent) and Hispanic/Latino (16 per cent) donors.

Affluent individuals who volunteer give twice as much as those who don’t volunteer. Although fewer people volunteered last year due to the pandemic, affluent donors who did spend time volunteering donated more than double the amount to charity on average than those who did not volunteer.

The study was a collaboration between Bank of America Private Bank and the Indiana University Lilly Family School of Philanthropy at IUPUI.