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March 2010; PNC Wealth Management | Several banks, notably the Bank of America, publish studies about the behavior of their wealthier clients, with occasionally interesting implications for charitable and philanthropic giving. This study from PNC reveals that for the very wealthy, the recession is compelling them to cut back on their giving in order to protect their seven-figure or higher assets.
Based on a sample of 1,046 respondents, (867 nationally and 179 from South Florida, over half with more than $1 million in assets, the remainder had more than $500,000 in assets), polled in the last quarter of 2009, PNC found sharp reductions in charitable giving by the ultra wealthy (with $5 million or more in assets): donation totals of $1 million or more were made by 15 percent of PNC’s ultra-wealthy in 2007 to 1 percent in 2009.
Twenty-eight percent of all respondents reported plans to cut back on their charitable giving in 2010 compared to 13 percent reporting an intention to increase. A larger proportion of the ultra wealthy (25 percent) said that they were concerned about their “ability to give to charities” compared to 16 percent of respondents with assets between $500,000 and $1 million.
The spin given by PNC’s Wealth Management staff is that these wealthy and ultra-wealthy people “are refining their giving to reflect the potential for greater impact to specific issues that are most meaningful to them . . . [and] are becoming more mission-driven and governed less by emotion.”
That’s one way to interpret it. Another is that, unlike the charitably minded blue collar and white collar working stiffs who give large proportions of their income to charity and philanthropy through workplace and online giving, the ultra-wealthy are pretty clear about their priorities, even with millions sitting in PNC and other bank accounts.
The PNC survey is sobering information for nonprofits to better understand how slowly the nation’s largest individual givers are likely to return to their previous levels of generosity.—Rick Cohen