June 30, 2005 Press Release

 

WEALTHIEST AMERICANS HAVE REDUCED CHARITABLE CONTRIBUTIONS 70% SINCE 1998-2000 PERIOD

 

Donations Average 6 Percent of Annual Income

 

Knocked Down By Bear Market, Contributions Failed to Rebound With Stock Prices

 

 

CHICAGO, June 30, 2005 – The wealthiest aren’t giving nearly as much these days.

 

Charitable contributions from U.S. households with a net worth of $5 million or more, excluding primary residence, fell 70% from an average of $600,000 for the 3-year period 1998-2000 to $180,000 for the period 2002-2004, according to a new report from Spectrem Group released today.  The average contribution for the most recent single year represented 6.1 percent of annual income.

 

The wealthiest segments showed the smallest percentage declines in giving, according to the Spectrem Perspective™ report “Charitable Giving and the Affluent Market.”  Households with a net worth of more than $25 million, excluding primary residence, saw their average donation decline 38% from 1998-2000 to 2002-2004.  Those with a net worth of $10 million to $25 million, also excluding primary residence, reduced giving by 79% over the period, and donations by the $5 million to $10 million group fell 93% on average.

 

“When the stock market began to crumble in 2000 as the Internet boom ended, the wealthy substantially cut back their charitable giving.  While the market has regained most of those losses, our new data show that donations from wealthy households as a whole continued to fall.  In fact, the only segment that showed any recovery in charitable giving from levels seen in 2000-2002 is households with a net worth of more than $25 million.  And even those households remain far below their 1998-2000 giving levels,” said Catherine S. McBreen, Managing Director of Spectrem Group.

 

 

Average 3-Year Charitable Contributions (Ultra High Net Worth Households)

 

Household Net Worth (excluding primary residence)	1998-2000	2000-02	2002-04
Total UHNW ($5 million and more)	$600,000	$218,000	$180,000
$5-10 million	$575,000	$53,000	$41,000
$10-25 million	$462,000	$184,000	$96,000
More than $25 million	$1.14 million	$598,000	$710,000

 

 

The average charitable contribution for the much broader category of affluent households, those with more than $500,000 in investable assets, was $7,748 for the single year 2004.  This represents 6.0% of annual income.

 

The report “Charitable Giving and the Affluent Market” is based on a Spectrem Group survey of affluent households as well as Spectrem Group’s 2005 Ultra High Net Worth Study.  The UHNW study was conducted in the spring of 2005, generating 500 responses to a mail survey of households with a net worth of $5 million or more, excluding primary residence.  The UNHW data have a margin of error of plus or minus 4.4 percentage points. 

 

 

About Spectrem Group

Spectrem Group is a strategic consulting firm specializing in the affluent and retirement markets.  It integrates proprietary research with expertise in building business, marketing and M&A strategies.  Spectrem professionals have held senior management positions at leading global companies.  Through a collaborative process, they create and implement practical and profitable strategies that fit the cultures of client firms.