Study: Wealthy would give more to nonprofits if they were more trustworthy

NEW YORK (Market Wire) – America's affluent who are mostly self-made, family-workaholics, are much more generous than expected, and it's not just Warren Buffet, Bill Gates, Bill Clinton, Sir Richard Branson and Bono who are donating.

According to a new survey conducted by the New York City-based Luxury Institute, 31 percent of the wealthy report that they currently donate to nonprofits. Another 25 percent say they do so now and will do so in their wills and another 15 percent plan to give soon.

Only 11 percent do not plan to donate and 15 percent are not yet sure what they will do. These trends apply across all levels of the wealthy based on income and net worth.

"The wealthy cited two major reasons why they donate to nonprofits," said Milton Pedraza, Luxury Institute CEO. "64 percent stated ‘the opportunity to make changes in the world in important areas' as their primary reason, while 53 percent cited ‘seeing a compelling example of great need,' as the second most important reason."

Contrary to popular myth, he said, these fortunate individuals are, for the most part, well-rounded human beings whose generosity makes their humble beginnings, parents and grandparents proud.

According to the study, the wealthy cite two major reasons for not donating to nonprofits:

1. Fear of not having enough money for self and family: 66 percent mentioned this reason. This was the first choice reason for 35 percent. However, once they feel they have enough to meet their needs, 31 percent say they will donate.

2. Distrust of nonprofits: 56 percent overall mentioned this issue, with 25 percent citing it as their first reason. Only 35 percent said they believed nonprofits would use donations wisely. Another 35 percent believe nonprofits do not use donations wisely.

One critical unmet need was for the active engagement of Community Foundations, other nonprofits, and financial advisors in providing specific kinds of philanthropic education for the wealthy, as well as their children. This survey documents the wealthy's strong desire for objective and non-conflicted information about which nonprofits are worthy of donations. It probes the desired role of financial advisors in philanthropy, the low current use of Internet information sources and provides opinions about donating online and the estate tax, among other topics.

The survey was conducted with a nationwide sample of more than 900 wealthy consumers with a median age of 43, an average household income of $330, 000 and an average net worth of $2.4 million.