U.S. Trust Study of the Philanthropic Conversation: Understanding advisor
approaches and client expectations
& The Philanthropic Initiative - October 2013
(Click the title for the full report; see below for the DANA summary)
Basic methodology: Findings were the result of an
online survey, administered in August 2013 to more than 300 financial advisors
and 120 high net-worth individuals, all randomly selected.
The purpose of this study was to inform financial
advisors on the status and impact of philanthropic discussions with clients.
However, findings on why high net worth individuals give are also useful to
those outside the financial industry.
- The top three reasons high net worth individuals
said they give to charity are that they:
- are "passionate about a cause”
- have a "strong desire to give back”
- want to have a "positive impact on society and
- Only 10% of the high net worth respondents in
the survey stated that reducing their tax load was one of their reasons for
giving financially to a charity.
- 6% of high net worth respondents stated that
they would reduce their giving if the estate tax was eliminated and 45% stated
that they would reduce giving if the income tax deductions were
eliminated. Both of these figures are less than financial advisors
estimated - they anticipated that 40% and 78% of high net individuals would
reduce giving, respectively.
- High net worth individuals stated the reasons
they have reservations about giving or do not give at all include:
their donation "won’t be used wisely by a nonprofit recipient”(cited by 30% of
there is not a connection or knowledge about a certain nonprofit (cited by 24%)
they believe if they give they will receive additional donation requests from
others (cited by 17%)
- 45% of high net worth respondents expressed the
importance of involving their children and/or grandchildren in the discussion
about charitable donations so that they may see the importance of charitable
- 74% of advisors cited that "discussing philanthropy
with clients is good for their business” and 75% also believing the discussions
lead to deeper relationships with their clients.
- Overall, there is a disconnect between why
financial advisors believe high net worth individuals are (or are not) giving,
and why they believe they are giving.
How this should impact the way nonprofits operate:
DANA believes that nonprofits need to be aware of the negative perceptions of
the nonprofit sector, i.e. that donations "won’t be used wisely.” Nonprofits should
work to address these concerns through an increased level of transparency,
communication, and the development of meaningful relationships with volunteers,
donors, other nonprofits, and the community at large. Building trust with
donors and the greater public is imperative in order to create meaningful
impact on the community.
Additionally, while tax incentives are part of the reason
high net worth individuals give as much as they do, it is not the primary
reason for giving and the overall rational for charitable involvement is a
deeper, more complex relationship.