Will the Grinch Steal Christmas?
Posted December 1st, 2014

Will the Grinch Steal Christmas?


A recent report on charitable giving in the U.S. has caused some to wonder if the widely publicized income gap has turned into a generosity gap.

Do wealthier donors have something in common with the Grinch?

According to The Chronicle of Philanthropy, high-income earners give a smaller share of their income than those with lower incomes. Specifically, those who earned $200,000 or more gave 4.6 percent less of their income in 2012 than they did in 2006. During the same period, those who earned less than $100,000 annually donated an average of 4.5 percent more of their income.

Despite these statistics, don’t rush to question the generosity of high-income donors. While the percentage of income these individuals donate is smaller, the impact of their charitable gifts is profound. The Chronicle study reported the total amount donated by high-income earners rose by an inflation-adjusted $4.6 billion between 2006 and 2012, to a total of $77.5 billion.

High net worth donors make a major impact.

Another recent survey highlights the widespread generosity of wealthier donors. The 2014 U.S. Trust Study of High Net Worth Philanthropy found that 98.4 percent of high net worth households made charitable gifts in 2013, the highest percentage since the survey began in 2006 and three percentage points higher than was reported in 2011. For purposes of the survey, high net worth households are defined as those with annual incomes of $200,000 or more or at least $1 million in assets excluding the home.

Additionally, the $68,580 average gift size among those surveyed was 28.1 percent higher than in 2011. The average gift among those worth $5 million or more rose by an even greater percentage—41 percent—to $166,602.

Looking to the future, continued improvement in investment values and donors’ renewed financial confidence will likely translate to even higher levels of giving among the wealthy. Some 35 percent of high net worth individuals surveyed in 2013 plan to give more in the near future, 11 percent more than in 2012.

The 80/20 rule.

It’s important to remember that, although the percentage of income given to charity is currently lower among high-income donors, the dollar amount is significantly higher.

In general, charities can expect 80 percent of their donations to come from the top 20 percent of their donors. While it is critical to encourage gifts from all members of your constituency, charitable gifts from high net worth and high-income donors can go a long way toward meeting a charity’s fundraising goals.

Encouraging gifts from these individuals should be a priority among fundraisers. Consider Sharpe’s Data Enhancement Services to learn how to identify your high net worth and high-income donors.

Screen Shot 2014-12-01 at 9.46.03 AM


Print Friendly, PDF & Email

The publisher of Sharpe Insights is not engaged in rendering legal or tax advisory service. For advice and assistance in specific cases, the services of your own counsel should be obtained. Articles in Sharpe Insights may generally be reprinted for distribution to board members and staff of nonprofit institutions and other non-donor groups. Proper credit must be given. Call for details.

Sharpe Insights

Site Search

Sharpe Insights Archives

2024 Issues 2023 Issues 2022 Issues 2021 Issues 2020 Issues 2019 Issues 2018 Issues 2017 Issues 2016 Issues 2015 Issues 2014 Issues 2013 Issues 2012 Issues 2011 Issues 2010 Issues 2009 Issues 2008 Issues 2007 Issues 2006 Issues 2005 Issues 2004 Issues 2003 Issues 2002 Issues 2001 Issues 2000 Issues 1999 Issues 1998 Issues 1997 Issues