How Groups of the Rich Diverge in Philanthropy
Thursday, December 6, 2007
We've long known that the rich are different from the rest of us; F. Scott Fitzgerald told us that. But a new study shows that the rich are different from one another, at least when it comes to charitable giving.
Amid what some call the golden age of philanthropy, as high-tech entrepreneurs and financiers amass extraordinary wealth and emerge as philanthropic players, a study to be released today reveals specific behavioral patterns and motivations among the nation's wealthiest donors.
The study's authors randomly surveyed 1,400 of the country's most affluent households -- defined as those with an income above $200,000 or a net worth higher than $1 million -- and discovered distinct philanthropic characteristics among donors grouped into 12 profiles.
Researched and written by the Center on Philanthropy at Indiana University and sponsored by Bank of America, the report, titled "Portraits of Donors," is believed to be the first quantitative study of high-dollar philanthropists. Among the findings:
¿ The "very wealthy," households with a net worth above $50 million, donate more money than other affluent households to every type of organization except disaster relief groups. They give to charity largely as a means to leave a legacy and are more concerned than others about determining the impact of their gifts.
¿ Entrepreneurs demand greater accountability for their gifts and donate to charities because it is "expected in their social network" and "makes good business sense." They are more likely than other affluent people to give to educational, environmental and international organizations.
¿ "Dynasty" households, in which fortunes are passed through generations, give the most to arts and cultural organizations. "Setting an example" is a key motivation for giving, and they are the most likely to include their children and grandchildren in philanthropic decisions.
A few characteristics transcended the profiles. For example, many of the households surveyed indicated that they were motivated to give because of a "galvanizing event" in their lives, said Cary S. Grace, managing director of Bank of America. She cited as an example a man who lost a brother to cancer and later gave $12 million for cancer research.
"That becomes the core part of their philanthropic mission," Grace said.