High Net-Worth Philanthropy: What Wealthy Donors Want. Insights from the Arcus Study of High Net-Worth Philanthropy for this year. The Arcus Study of High Net-Worth Philanthropy has identified some interesting trends on attitudes and giving behaviors of high net-worth donors, including reasons they give or stop giving. Based on a survey of some five hundred wealthy individuals with a household income greater than $400,000 and/or a net-worth of at least $3 million, the Arcus Study of High Net-Worth Philanthropy confirms that maintaining deeper relationships requires continuous communication with high net-worth donors. However, it is interesting that one of the primary reasons wealthy donors stop giving is organizations ask for donations too often or ask for too much. This is one of many insights from the Arcus Study about attitudes and giving behaviours of wealthy donorsin Canada.

Non-profit organizations can use the research insights to develop deeper relationships and engage wealthy donors more effectively. The report identifies the top ten imperatives for successful fundraising, including the need for donation and volunteer appeals to meet the changing economic and social environments of wealthy donors.

Additional information

High Net-Worth Philanthropy: What Wealthy Donors Want.

The report found that wealthy donors have high expectations of charitable organizations and cite sound business practices (98 percent) and spending an appropriate amount on overhead (91 percent) as the top factors in determining which organizations they decide to support.

High net-worth donors have also strategically shifted their support from long-term organizational goals to immediate needs. They are more likely to be motivated to give if they believe that their gift will make a difference quickly (83 percent), which replaced wanting to give back to the community (69 percent) as the top priority. Important motivations also included feeling financially secure (76 percent) and wanting to give to an organization that is efficient (64 percent).

Reasons why wealthy households give

Clearly, wealthy families want to invest wisely to get a greater impact for their donations. Donors have begun to balance short-term and long-term needs of non-profit organizations. The challenge will be for non-profit organizations to engage donors in both long- and short-term needs.

Reasons why wealthy households stop giving

Over 80 percent of wealthy households stop giving to a charity because they no longer feeling connected to the organization. The study found that 24 percent of donors stopped supporting a charitable organization, while 14 percent discontinued their support for at least two organizations. Other reasons why wealthy donors discontinue their giving include deciding to support other causes (65 percent) and feeling they are being solicited too often (47 percent).

Over half of High Net-Worth individuals say that they are being contacted for donations too often or for amounts that are in excess of their expectations. That is a significant shift from past surveys in which the primary reason for not donating to a charity was the lack of a personal connection with the organization. After the recessionary period donors may have become more sensitive to being solicited because of declines in their personal financial positions.

This shift in expectations will require a recalibration of how non-profit organizations approach strategies to engage wealthy donors. Even though wealthy donors may not have been impacted financially by the economic crisis, they may be experiencing economic and financial uncertainty, which will influence their philanthropic decisions.

Volunteerism is growing

It appears that high net-worth donors are investing more time and talent in the causes that they are involved with. On average the time volunteered has increased from 205 hours in 2006 to 298 hours this year. High net-worth individuals tend to volunteer their time at organizations that receive their donations. Increasingly, opportunities to volunteer factor in philanthropic choices made by donors.

A key driver of success for non-profit organizations will be their capacity to strengthen relationships with donors – to identify the types of volunteer opportunities that wealthy donors seek and customize volunteer programs to meet their needs. This trend is a significant opportunity to engage in deeper conversations with net-worth donors, because the time and talent volunteered by them has increased by 14 percent since 2006 to 81 percent this year. In addition, this year, more than half volunteered more than 100 hours and a third volunteered over 150 hours.

High net-worth individuals donate where they volunteer

There is a strong correlation between hours volunteered and the amount high net-worth individuals donate to a non-profit organization. Those who volunteer over 75 hours a year donate, on average, twice as much ($63,000) as those who volunteer less than 35 hours a year ($24,000). High net-worth individuals have become more strategic in their giving too. They tend to also have higher expectations from organizations where they volunteer and are more willing to invest their time and talent in capacity building activities. Average gifts to organizations with a high level of involvement of wealthy individuals grew 25 percent in the past five years to $86,000.

The most common volunteer activity for wealthy donors is to serve on the board of a non-profit organization (71 percent), followed by event and fundraising activities (53 percent). A smaller segment is involved in offering their talent, primarily professional services (36 percent), related to business and marketing skills. It is important to note that over half of the wealthy donors surveyed said that they tend to give more to organizations where they are actively involved on boards or are in a position of oversight at the organization, especially when they feel passionate about the cause supported by the organization.

Contact Arcus for a presentation of a synopsis of the report to your Management Team and Board. If you are interested in retaining our services, please contact Merril Mascarenhas, Managing Partner, by phone at +1 (416) 710-2727 or Email.

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