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Study Shows Affluent Americans Changed Giving Behavior

Americans’ generosity didn’t waver during the 2020 phase of the COVID-19 pandemic, but there were dramatic shifts in behavior.

Nearly 90 percent of affluent Americans gave to charity during 2020 and 47 percent donated to charitable organizations or financially supported individuals or businesses in direct response to the pandemic.

The behavioral shifts were seen in an increase in supporting local community needs, an increase in unrestricted gifts to a variety of nonprofit organizations, and an increase in virtual interactions between nonprofits and donors.

Those are some of the preliminary findings from the “2021 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households,” a nationwide survey of more than 1,600 affluent households, conducted in collaboration with the Indiana University Lilly Family School of Philanthropy at IUPUI. “Affluent Households” is defined for the study as a net worth of $1 million or more, excluding a primary residence, or household income exceeding $200,000 annually.

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Additional ways in which affluent households responded to this historic period included:

  • In response to the pandemic, 93 percent of households maintained or increased their giving to frontline organizations providing basic needs, healthcare and medicine; 85 percent of households maintained or increased their giving for spiritual and religious purposes; and, 94 percent of households maintained or increased their giving for other purposes (e.g., education, the arts, and the environment).
  • Despite the constraints of social distancing and other challenges brought on by the pandemic, nearly one in three affluent Americans (30 percent) volunteered during 2020. Among those who volunteered, 71 percent either maintained (48 percent) or increased (23 percent) their volunteering activities.

“This sustained commitment by donors shows the importance of a strategic approach to philanthropy that is still flexible enough to respond to a sudden surge in need. It is also a testament to the resilience of those charitable organizations that were able to pivot and effectively use technology to engage with donors during such difficult times,” said Ann Limberg, head of Philanthropic, Bank of America Private Bank, via a statement.

Affluent households focused efforts primarily on the communities in which they live, increasing support of local charities, individuals and businesses. Some 90 percent of affluent households that increased their giving for basic needs and medical care in 2020 directed their donations to organizations in their own communities, 35 percent supported U.S. organizations outside of their community, and 15 percent gave internationally.

While donors often place restrictions on how or where their gifts may be spent, many donors gave general current use (i.e., unrestricted) gifts in 2020, allowing recipients flexibility to meet priority needs. Among households who gave to arts and cultural organizations, health and medical organizations, or educational institutions, large numbers gave unrestricted gifts (83 percent; 75 percent; 74 percent, respectively).

“In times of crisis, Americans have historically responded quickly and generously to assist others and address urgent needs,” according to Una Osili, Ph.D., Efroymson Chair in Philanthropy, professor of Economics and Philanthropic Studies and Associate Dean for Research and International Programs at the Indiana University Lilly Family School of Philanthropy.

“During the pandemic, unrestricted giving by affluent Americans supported continuing operations at many nonprofits, enabling them to continue serving their communities, and was a significant aspect of giving behavior during the pandemic. Additionally, many households expanded giving by donating to local businesses and individuals during the pandemic,” according to Osili.

The vast majority of affluent Americans (88 percent) said the lockdowns and social distancing, common in 2020, had little to no impact on their households’ philanthropy. However, the pandemic did change how donors engaged with the organizations they support, with nonprofits adapting to restrictions on personal interaction by shifting programming, events and other interaction into virtual formats.

Nearly one-third of affluent Americans (31 percent) reported that the organizations they supported reached out to them virtually. Among those households, 53 percent experienced more frequent contact via email, 43 percent experienced more frequent virtual events and galas, 32 percent experienced more frequent outreach via social media, and 27 percent experienced more frequent outreach via physical mail.

Development of the survey was a collaborative effort between Bank of America and the Indiana University Lilly Family School of Philanthropy. The Indiana University Lilly Family School of Philanthropy analyzed the responses for data validity and generated the statistical output. Analysis of survey results was a joint effort between the partners.

This article first ran at The NonProfit Times. It is reprinted with permission.

Paul Clolery

Paul Clolery is vice president and editorial director of NPT Publishing Group and The NonProfit Times, the leading business publication for the charitable, tax-exempt sector.