Ultra Wealthy Charitable Donations Down in a Troubled Economy

January 2011

Charitable donations took a hit in 2010 as ultra-wealthy households remained concerned about the economy. More than three-quarters of ultra-wealthy families expressed concern about the rising national debt and a prolonged economic downturn. Younger ultra-wealthy households are increasingly worried about maintaining their current financial position and having to delay their retirement.

Overall, annual charitable donations for this wealth group dropped from $24 484 in 2009 to $13,207 this year. Overall, this continues the trend from 2008 to 2009 when almost a quarter of ultra-wealthy households said they had decreased their charitable donations from the previous year.

The most common charitable donation falls between $1,000 and $4,999. Twenty percent give less while 38% give more. The average donation in 2010 is $5,080 and is lower than 2009’s average of $6,392.

More than two-thirds of the ultra wealthy make charitable donations of $5,000 or more in a typical year. Younger investors are most likely to donate from $10,000 to $25,000 and above. Investors with a net worth between $10 million and $14.9 million (not including primary residence – NIPR) are most likely to annually donate $10,000 or more. Notably, Senior Corporate Executives are the most generous group with 68% donating $10,000 or more.

Those investors who are responsible for making their own financial decisions usually donate between $5,000 and $9,999 during a typical year. Interestingly, investors who use a financial advisor usually will make charitable donations of $10,000 or more.