In America, charities depend on the kindness of wealthy investors for the funds needed to operate.
According to our new whitepaper, Spending Choices Among Wealthy Investors, the kindness is extended in a big way. There are variations on how much investors contribute to charity, often based on individual wealth levels, but individual charitable contributions are far greater than the more odious expenditure of political contributions.
“The image that wealthy people think only of themselves and their own personal wealth is woefully inappropriate,’’ said Spectrem president George H. Walper Jr. “Investors make sizable donations to a variety of charities, allowing their wealth to benefit others. While the monstrous donations are the ones that get the headlines, every day someone of great individual wealth makes a charitable contribution without requiring fanfare.”
The whitepaper shows expenditures of investors from various wealth segments. The Ultra High Net Worth investor, with a net worth between $5 million and $25 million, has the highest amount of charitable contributions and is also most likely to make contributions, with only 6 percent claiming no charitable offerings in the past 12 months.
Almost half of UHNW investors gave at least $5,000 to charity in 2015, and 28 percent gave more than $10,000. Ten percent gave as much as $25,000, and 5 percent offered more than $50,000 to charity.
There was a definite difference in charitable contributions by UHNW investors based on age. Eighteen percent of UHNW investors under the age of 48 gave nothing to charity, and only 18 percent in that age group gave more than $10,000. Among UHNW investors over the age of 64, 31 percent gave at least $10,000.
Among Millionaire investors with a net worth between $1 million and $5 million, 9 percent gave zero dollars to charity, and 68 percent limited themselves to under $5,000.
An examination of the age grouping among Millionaires shows that Millionaires between the ages of 36-44 are least likely to contribute to charity, with 26 percent claiming zero dollars offered in 2015. That’s a far larger percentage than the 8 percnet of those under the age of 36, or the 13 percent among Millionaires between the ages of 45 and 54.
It makes sense that less wealthy investors would be less likely to make sizable contributions to charity, and the research backs that claim. Among Mass Affluent investors with a net worth between $100,000 and $1 million (not including their primary residence), 18 percent gave nothing to charity in 2015, and 67 percent gave no more than $5,000. Only 3 percent gave more than $10,000 to charity.
The Mass Affluent investors segmented by age against showed higher charitable contributions among older investors. While 31 percent of Mass Affluent investors under the age of 36 did not make any contributions in 2015, only 11 percent of those over the age of 64 gave nothing. Almost 20 percent of the oldest segment gave at least $5,000 to charity.
The investors were also asked about their political contributions, and those numbers were surprisingly low, even among the wealthiest investors. Only 41 percent of UHNW investors made any amount of political contribution in 2015, and only 4 percent gave more than $5,000 to a political campaign.
Among Millionaires, only 28 percent made any contributions, almost all under $5,000, and among Mass Affluent investors, only 20 percent contributed to politics at all, and all of those made contributions of less than $5,000.