Charitable giving has declined among Main Street investors. Learn why some are cutting back – and why a smaller share is giving more.
What factors are driving these trends in charitable giving? Hard times are the primary factor behind a decrease in giving among these Main Street Americans, who have $100,000 or less in investable assets. More than 97 percent of those who say they have reduced their charitable giving cite the statement, “I can’t afford to give as much. My discretionary income is down.”
A small share of Main Street investors doesn’t feel it’s their responsibility to help others in an economic downturn. About 6 percent cited the statement, “Everyone needs to help themselves in a recession.”
Six percent also agreed with the statement, “the government should be stepping in, not private individuals.” Roughly one-fourth of Main Street investors does not give to charity.
In comparison, Main Street investors who are giving more since the start of the recession appear to be more sympathetic to the plight of less fortunate Americans. Growing need emerges as the dominant factor prompting those Main Street investors who have increased their levels of charitable giving.
More than 45 percent cite the statement, “Many charities are facing increased demand for services and decreased funding.” More than one-third say they are giving more because they can afford to, citing the statement “my finances have not been significantly impacted by the recession.”
Increased awareness of others’ misfortunes has motivated more than one-third of Main Street investors to give more. They cite the statement “I’ve become more empathetic to people in need.” (Other studies find that tax write-offs motivate much of charitable giving in the U.S.)
Charitable giving trends vary by wealth levels, according to Millionaire Corner research that shows a significant share of extremely high net worth investors are worried about using their wealth to help others.
Rough 117 million U.S. households gave to charity last year, according to a special report from The Nonprofit Times. Giving among these households rose 1.9 percent in inflation-adjusted dollars from 2010 and accounted for 73 percent of the more than $298 trillion donated to charity last year. Charitable giving from all sources, including corporations, estates and foundations, rose nearly 1 percent in inflation-adjusted dollars.