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Helping your neighbor: A story of generosity

How affluent philanthropy expanded during the pandemic

 

As the COVID-19 pandemic raged across the world, more and more people found themselves out of work, struggling with food insecurity and lacking access to healthcare.

According to the latest Bank of America Study of Philanthropy, the generosity of affluent individuals continued during the pandemic.

During one of the most difficult times in modern history, it is not a stretch to say people needed help as much as they ever have. Americans, as always, rose to the challenge: local communities across the country came together while staying apart and neighbors did what they could to help each other.

 

While uncertainty reigned, some things didn’t change. According to the latest Bank of America Study of Philanthropy, the generosity of affluent individuals continued. Similar to previous studies, in 2020, nearly 90% of affluent households continued to give to charity. Additionally, the research found that 47% donated to charitable organizations or financially supported individuals or businesses in direct response to the pandemic.

 

In fact, one in three of the households surveyed increased their giving to support pandemic efforts.

Illustration of three house icons 2 of which are grey

 

In response to the pandemic, some households:

 

Made unrestricted contributions to nonprofits to sustain operations across a variety of causes

 

Expanded their generosity to include additional forms of support, such as giving directly to individuals and businesses affected by the pandemic

 

Focused on the communities in which they live, concentrating on giving locally to nonprofits, individuals or businesses

 

It’s clear that the global pandemic made many of these individuals give locally. Among households that increased giving to organizations providing basic needs and medical care:

 

90% gave to local organizations. 35% gave to national organizations. 15% gave to global organizations.

The commitment to basic needs, like helping fight food insecurity, was substantial.

 

Nearly one in four affluent households increased their giving at a local level by donating money or goods directly to individuals or local businesses in their community, more than two times as many as those who increased their giving to individuals or businesses outside their community.

 

Among households who gave to the following types of charitable organizations:

 

 

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The study explored increased giving during the pandemic more deeply in three areas: healthcare, higher education, and arts and cultural organizations. Donors were unlikely to impose restrictions on their gifts and adopted more flexible approaches to their giving.

 

% of unrestricted gifts among households giving to the following causes in response to the pandemic

83% Arts and cultural organizations, 75% Health and medical organizations, 74% Education

While some affluent households loosened restrictions on their giving, others focused on supporting specific needs. Those who increased giving to health-related causes focused on the following areas:

 

  • 49% - Hospital supply chain issues
  • 32% - Populations at risk of severe symptoms
  • 30% - Virological or epidemiological research for a treatment or vaccines
  • 34% - Other pandemic-related health or medical issues

 

While no one knows what the future might hold, most affluent households don't anticipate that their philanthropic behavior will change as a result of the pandemic. When asked about their future giving intentions:

 

  • 74% don’t expect to change their long-term philanthropic behaviors
  • 20% expect their charitable giving to be more directed to specific issues
  • 5% expect their philanthropy to be less restrictive

 

As nonprofits continue to plan how they’ll adapt to the impact of the pandemic, affluent donors expect to continue providing support in their communities for the causes they love.

 

Methodology

The 2021 Bank of America Study of Philanthropy asked about giving in 2020. Development of the survey was a collaborative effort between Bank of America and the Indiana University Lilly Family School of Philanthropy at IUPUI. The Indiana University Lilly Family School of Philanthropy analyzed the responses for data validity and generated the statistical output. Analysis of survey results was a joint effort between the partners.

 

The survey was conducted using data obtained by Ipsos, including responses from its KnowledgePanel®, a nationally-representative, probability-based panel offering highly accurate and representative samples for online research. Ipsos engaged with the online panel, administered the survey to them, and scrubbed the responses for data validity.

 

The Study is based on a survey of 1,626 U.S. households with a net-worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more.

 

The survey questions in the 2021 Study included many that were modeled after those found in the Indiana University Lilly Family School of Philanthropy’s Philanthropy Panel Study (PPS), which is a module of the Panel Study on Income Dynamics (PSID) conducted at the University of Michigan. PPS biennially assesses the giving and volunteering behavior of the typical American household. Questions about high-net-worth donors’ motivations for giving were modeled after questions asked in surveys for the Lilly Family School of Philanthropy’s regional giving studies.

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as “MLPF&S” or “Merrill”) makes available certain investment products sponsored, managed, distributed or provided by companies that are affiliates of Bank of America Corporation (“BofA Corp.”). MLPF&S is a registered broker-dealer, registered investment adviser, Member SIPC, and a wholly owned subsidiary of BofA Corp.

 

Institutional Investments & Philanthropic Solutions (“II&PS”) is part of Bank of America Private Bank, a division of Bank of America, N.A., Member FDIC, and a wholly owned subsidiary of BofA Corp. Trust and fiduciary services and other banking products are provided by wholly owned banking affiliates of BofA Corp., including Bank of America, N.A. Brokerage services may be performed by wholly owned brokerage affiliates of BofA Corp., including MLPF&S.

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