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Charitable Giving Declines in 2009. A Bright Spot: Advisors Can Still Get Paid on Charitable Assets

Charitable Giving Declines in 2009. A Bright Spot: Advisors Can Still Get Paid on Charitable Assets

Our sister publication, Trusts & Estates magazine, writes that giving by HNW individuals is the heart and soul of philanthropic activity in the United States. Alas (but not unsurprisingly), that figure dropped in 2009. What happened? Can you guess? "The cause for these declines is the 'Great Recession,' which began in December 2007 and supposedly ended in June 2009, T&E writes in its Wealth Watch newsletter. A bright spot? The wealthy givers are increasingly using CPAs . . . and financial advisors. And they are using donor advised funds more and more. And did you know that FAs can still get paid on donor advised fund assets?

A digression: One could argue that this isn't a "Great Recession" at all. See table below.perrychart

Here is an excerpt from the article:

Charitable Vehicles

"More than 16 percent of wealthy households gave to charitable giving vehicles such as private foundations (PFs), donor-advised funds (DAFs) and charitable trusts in 2009. The average amount given to these vehicles increased by 21 percent, from $62,680 in 2007 to $75,867 in 2009.


Finally, the study continued to examine trends in charitable giving advice sought by wealthy donors. Consistent with trends observed between the 2006 and 2008 studies, the 2010 study shows significant increases in donors’ use of accountants (68 percent in 2009 compared to 44 percent in 2007) and financial advisors (39 percent in 2009 compared to 28 percent in 2007) to help them make charitable giving decisions. Consulting with attorneys for charitable giving advice dropped from 43 percent in 2007 to 41 percent in 2009. High-net-worth households also consulted with non-profit personnel (24 percent) in their charitable decisions around philanthropic mission definitions and creation. More than 90 percent of wealthy households initiated the discussions with their advisors, and 85 percent were satisfied with the advice given."

The article concludes, "Although charitable giving by the wealthy decreased significantly in 2009 according to the study, the decline appears to be the result of nothing more than a very bad economy. The 'Great Recession' has affected us all. Let’s just hope that the changes aren’t structural."

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