Individuals and their families often seek to make positive societal and world change through philanthropic efforts. Philanthropy is one way families clarify their values and use their wealth to work together across generations to build their family's legacy for the greater good.

A 2020 study by the Milken Institute Center for Strategic Philanthropy found that the wealthiest 1% of society donates 99% of the world's charitable gifts. Also, U.S. philanthropists contributed 51% of the global giving, with donations of $90.5 billion that same year.

Most Philanthropic donors are between ages 50 and 70, but the younger generations, Gen X and Millennials, give more than older donors as their wealth increases. Here are seven other things to know about philanthropy:

1. Over half (56%) of investors have a giving strategy, and 22% of investors would consider having one.

2. Many investors work with their financial professionals (63%) and family members (43%) in developing their giving strategy.

3. 91% agree that a charitable giving strategy is part of their overall wealth strategy.

4. Investors with lower wealth tend to use donor-advised funds, whereas investors with more wealth use a variety of investment vehicles.

5. One-third see their giving strategy changing over the next two years, and many will increase their giving and support more organizations.

6. Nearly all investors claim to be at least somewhat engaged with the organizations and charities they support.

7. 41% engage in sustainable investing, and higher wealth and younger investors are more likely to engage in sustainable investing.

Source: Charitable Giving Study, March 2022, BNY Mellon.

Of those investors that give to philanthropy, many indicate they will increase the amount they give, give to more organizations, and change their method of giving. The top five types of assets that philanthropists give include cash, securities, business interests (company shares of stock), collectibles and art, and cryptocurrencies.

Working with a financial professional can help investors develop a giving strategy as part of their financial plan and determine which investment strategies to use. Financial, legal, and tax professionals can help provide insight into if a family foundation, charitable trust, private foundation, or other entity such as an LLC is appropriate for their situation.  

Important Disclosures

Content in this material is for educational and general information only and not intended to provide specific advice or recommendations for any individual.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by Fresh Finance.

LPL Tracking #1-05326016

Sources:

https://www.fa-mag.com/news/5-things-to-know-about-high-net-worth-family-philanthropy-63719.html

https://milkeninstitute.org/sites/default/files/2022-04/MI_Strategic_Pilanthropy_042622_final.pdf

https://www.bnymellonwealth.com/assets/pdfs-strategy/charitable-giving-report-final.pdf