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Generosity Volatility

generosity


What’s going on out there? The rich are getting richer and giving less and the middle class is struggling and giving more! According to a Chronicle of Philanthropy study of IRS data the percent of income of the wealthy ($100,000+ income) that is being given to nonprofits declined 3.3% from 2006-2012 and declined 4.5% for those making $200,000+.

During the same period the share of income given to nonprofits from families earning under $100,000 increased. You guessed it…the lower the annual income the higher the percentage of income given to nonprofits.


What’s going on here? The study cites the decline in generosity from the “wealthy” is most pronounced in thirty-six of our largest cities with drops of 9% in places like Philadelphia, LA, Minneapolis-St. Paul and Washington DC. Urban living is increasingly expensive…for everyone, not just the well off.

We are not discussing the total amount of money given. Total given by the wealthy was up $4.6 billion in 2012 reaching $77.5 billion while $57.3 billion was given by those earning under $100,000.

The issues at play probably include the fact that a larger proportion of the “wealthy” are getting closer to retirement than the broader population, and are pulling back spending a bit. The cost of college tuition is in the stratosphere and is hitting the wealthy disproportionately more because their kids are more likely to go to college than the larger population. Sad but true.

The rise in generosity from the <$100,000 group may be because they perceive themselves as closer to the need that many nonprofits address and therefore may be more loyal donors. They may be more likely to practice their faith, give more to their house of worship and touch more nonprofits as a result. This is especially true outside of large urban areas.

There are no doubt many reasons for these trends, and I welcome and invite your thoughts on why this may be happening, and if you think these changes will continue. Please comment.

For more information about Copley Raff and its spectrum of consulting services, please see www.copleyraff.com. Follow CRI on Twitter @copleyraff.

 

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