Wealthy givers turn to professionals for advice

November 24, 2008

Wealthy people are getting more advice from hired professionals and less from not-for-profit personnel and peers when making decisions about charitable giving, a new study shows.

Accountants were a leading source of advice for 43.2 percent of respondents, according to preliminary results of the study, which was conducted by the Center on Philanthropy at Indiana University. Nearly 42 percent looked to attorneys and 32.6 percent named wealth managers.

The figures total more than 100 percent because some respondents gave more than one answer.

Times have changed. An initial, nearly identical survey undertaken two years earlier by the center found that 41.2 percent of respondents looked to not-for-profit personnel, and 36.9 percent to peers.

The most recent survey was conducted last summer.

"The economy started to tighten," said Patrick Rooney, the center's interim executive director and research director. "People were thinking more, 'I'm giving these gifts. Let's be strategic about it.'"

Another factor driving wealthy people to professionals, Rooney said, might be that they felt unable to make major gifts, so instead wanted to plan for bequests after their death.

The study also touched on reasons why wealthy people stop supporting certain organizations.

Nearly four in 10 donors stopped supporting a charitable group in 2007. Their reasons: "no longer feeling connected to the organization," (57.7 percent); "deciding to support other causes," (51.3 percent); and "feeling they were being solicited too often," (42.3 percent).

Questions about stopping giving and donors' reasons for doing so were new to this year's study.

Rooney said those results showed that not-for-profit managers "need to find a balance between making people feel personally connected, but not soliciting them too frequently."

The study, called the 2008 Bank of America Study of High-Net-Worth Philanthropy, was released today. It focused on households with incomes greater than $200,000 or net worth of at least $1 million. The opinions were gleaned from 700 respondents through surveys of more than 20,000 households in wealthy neighborhoods across the country.

Full results, including the average amount that prosperous households donated in 2007, will be released in the first quarter of 2009.

The 2006 study found that the average donation in 2005 was $117,488, and the median was $15,500. The figures excluded giving to relief from natural disasters, notably Hurricane Katrina and the Asian tsunami. Including giving for disasters, the average amount donated was $120,651, and the median was $16,500.

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