During the financial turmoil caused by the coronavirus pandemic, many Americans responded by tightening their budgets and spending less across all categories. New findings show that, in comparison, affluent households gave more to their communities instead.
The latest Study of Philanthropy report from Bank of America showed that, despite the challenges presented by the COVID-19 outbreak, affluent Americans continued to donate money to those who needed it most in 2020.
But while the percentage of affluent households who made donations — nearly 90% — remained similar to past years, the average amounts given to charities increased by 48% since 2017 ($43,195, up from $29,269).
Bank of America identified new trends in charitable giving for 2020
Amid pandemic-era budget cuts for many nonprofit organizations — and a general spirit of giving in a tumultuous year — affluent households poured more funds into their charitable giving efforts in 2020 than in years past.
As in previous years, much of this money went to initiatives focusing on:
- Religion (32% of dollars donated)
- Basic needs (20%)
- K-12 and higher education (16%)
And because 2020 was also a year marked by a global health crisis, 47% of affluent donors also directed their giving efforts to charitable organizations, individuals and businesses in direct response to the pandemic. Meanwhile, 93% of households kept up their donations — or poured even more into them — to provide funds for frontline organizations devoted to covering basic needs, health care and medicine.
Bank of America discovered that certain giving trends grew in popularity among donors last year as well. For instance, respondents were just about as likely to base their donation decisions on issues (44%) as they did on organizations (45%) — a shift from the frequently organization-driven donation strategies that were maintained before 2020.
Some of the biggest causes affluent households focused on last year included sustainable and impact investing (13%), as well as social and racial justice issues (22%). The survey also indicated that over 1 in 10 respondents prioritized this subject (19%), so this particular issue area may very well see more attention and support in the years to come.
Direct digital giving, charitable giving knowledge also increasing in importance
Other findings from the Bank of America report shed some light on other aspects of affluent giving that changed in 2020. More respondents utilized direct digital giving as an alternative to traditional giving vehicles, including:
- 57% of donors who gave via a nonprofit's website
- 18% who used GoFundMe and other crowdfunding platforms
- 17% who used payment processing apps, such as Zelle or Venmo
- 13% who used social media tools
Additionally, knowledge about charitable giving is quickly becoming an important factor for affluent donors across the board. Bank of America found that respondents who feel they're knowledgeable (48%) or expert (5%) about giving are more likely to be involved with the process — including monitoring the impact of their giving, ensuring their gift is having its intended impact and taking advantage of giving vehicles.
Still, the biggest challenges facing affluent donors today also revolve around charitable giving knowledge, including:
- Identifying what donors care about and deciding where to donate (40%)
- Understanding how much they can afford to give (32%)
- Monitoring their giving to ensure it has its intended impact (24%)
Methodology: Bank of America Private Bank and the Indiana University Lilly Family School of Philanthropy used Ipsos to conduct a survey of 1,626 affluent U.S. households in January 2021, based on their charitable giving in 2020. The nationally representative random sample included respondents with a net worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more.