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What You Need to Know about How and Why the Pandemic May Drive the Wealthy to Increase Their Giving

The pandemic has had a profound impact on many people’s perspectives—including the wealthy. Consider these results from a UBS Investor Watch survey of 3,800 investors across 15 markets globally conducted in May:

  • 68% want to make more of a difference with their lives.
  • 68% want to find a purpose with their lives.
  • 58% have become more religious and spiritual.
  • 40% want to be part of something bigger than themselves.

The same survey found that the pandemic led:

  • 93% to feel more appreciative of what I have.
  • 66% to feel guilty for being more fortunate than many other people.

We know that appreciation and guilt are two key motivators that drive donors to give, which I discussed in August during my Big Ten Fund Raisers Institute presentation, featuring many of the data points included in this article. Many investors have seen their capital grow significantly—the S&P 500 grew more than 100% over the past five years—and a large number are now looking for ways to use those resources to help others by driving change. That puts the onus on institutions to ensure that they benefit from this moment.

Giving is on the rise

Perhaps the most significant finding in the UBS survey is 45% of investors expect to increase their charitable giving activities compared to their giving before the pandemic. Another 38% plan to give at the same rate, while only 17% intend to give less. Put another way, nearly three times more people expect to give more than the share who intend to decrease their giving.

That broadly aligns with numerous surveys that GG+A has conducted of donors for our clients throughout the pandemic. For example, one recent survey—conducted on behalf of a public land grant university of alumni donors with total lifetime giving of at least $10,000 and non-alumni donors with lifetime giving of at least $25,000—found that 16% of respondents planned to increase their giving to the institution compared to 5% that expected to decrease their giving.

Those results suggest that now is an ideal time to be asking for money as that growth would build on the significant philanthropic momentum from last year. After all, overall giving in the United States reached $471.44 billion in 2020, setting a new record with a 5.1% growth rate, the largest one-year growth rate in five years, according to The Giving Institute’s “Giving USA 2021: The Annual Report on Philanthropy for the Year 2020.”

Most notably, overall giving accounted for 2.3% of total GDP—the largest share in more than 40 years. That record came amid a challenging year for nonprofit institutions as they dealt with the COVID-19 pandemic, the racial justice and social justice movements, widespread economic need, and a highly contested presidential election.

We saw some of the impact of those challenges in the first half of 2020 as donors to the Fidelity Charitable Gift Fund recommended grants totaling nearly $75 million to free food programs, a dramatic increase from $9.7 million in the first half of 2019.

Yet it’s interesting to note that donors maintained regular levels of support for organizations in other charitable sectors, such as arts and culture, international affairs, and religion.

How to ensure your institution benefits

Some of the growth in giving stems from the fact that we’re at the beginning of the greatest wealth transfer in history. Americans aged 70 and above at the end of this year’s first quarter had a net worth of nearly $35 trillion, according to Federal Reserve data.

They’re expected to hand down some $70 trillion between 2018 and 2042, according to research and consulting firm Cerulli Associates—with roughly $9 trillion of that going to philanthropy.

It’s important for institutions to ensure that you are positioning your institution to benefit from these trends. That starts with ensuring you have a thorough understanding of your donor base, which can be as simple as conducting a donor survey. For example, GG+A’s SurveyLab team regularly runs surveys for our clients that seek to assess whether an institution’s donors are having similar revelations about their post-pandemic experience, if the pandemic has led donors to adjust their giving patterns, and how they would like to be engaged with the institution.

The data those surveys produce can help the institution map out a strategy to ensure it can benefit from this critical moment. That’s important because these types of opportunities are rare.

 

If you would like to discuss your post-pandemic fundraising strategy or the capacities of GG+A’s SurveyLab, contact Rod Kirsch at RKirsch@grenzglier.com.

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About the author

Rodney P. Kirsch

Senior Vice President

Rod Kirsch, Senior Vice President, brings a wealth of experience in alumni relations and higher education fundraising to the firm. Over his 34-year career in university advancement, he has provided executive leadership in raising more than $5 billion of philanthropy. Rod is currently Senior Vice President Emeritus for Development and…