NEW YORK, Aug. 17, 2022 /PRNewswire/ — BNY Mellon Wealth Management today released its 2022 Annual Charitable Gift Report, which found that charitable giving started to rebound in 2021 after declining in 2020, with the number and total dollar amount of gifts increasing (10%), and the average gift size also increasing (27%).
Positive Progress in 2021
Charitable gift activity overall returned to historical, pre-pandemic trends as many nonprofits found ways to pivot and discover new approaches to build support for their missions and connect with donors.
“The financial markets held strong in 2021 and the planned giving activity demonstrated how sustainable the giving increase in 2020 was – and even with the present market uncertainty, people don’t stop giving,” said Crystal Thompkins, head of philanthropic solutions at BNY Mellon Wealth Management. “With the majority of planned gifts still being funded with cash, it’s important to focus on conversations about appreciated assets and ownership. There are significant opportunities for nonprofits to optimize giving by working with donors to consider non-cash gifts and craft unique gift solutions.”
Gift by Size: Gifts of more than $100,000 represented 29% of the total contracts in 2021 but accounted for 85% of the total gift dollars. Gifts between $10,000 and $50,000 represented most contracts at 54%, the same as in 2020.
Cash Gifts vs. Non-Cash Gifts: Cash gifts are still by far the most popular (83%), with non-cash gifts representing 17%, nearly identical to year over year comparisons.
Gift Flows: The gift flow ratio was 1.09, indicating new gift activity outplaced gift terminations. This was driven by healthcare organizations that experienced an increase in gift flows from .68 in 2020 to 2.24 in 2021. Faith-based/religious organizations experienced the biggest drop, decreasing from 2.94 in 2020 to .93 in 2021.
New Trust Activity: There was a 33% increase in new trust activity year over year, though total gift amounts decreased and the dollar amount of additions to trusts decreased by 50%.
Thompkins commented, “Although there was a slight uptick in the number of new trusts in 2021, trust activity continues its relatively flat to downward trend since the 2008-09 recession driven by lower charitable deductions due to the low applicable fed rate (AFR) and donors looking to make a more immediate impact with their giving. That said, trusts are still a giving strategy that can provide solutions to both tax and estate planning needs and philanthropic goals, especially as part of a comprehensive giving strategy.”
New Donors Outnumber Repeat Donors
When donors have access to the right information and advice, they are able to explore more charitable options to achieve their philanthropic goals. While attorneys and CPAs play an important role with donors in terms of gift execution, wealth advisors provide significant guidance when it comes to donors’ philanthropy.
New Versus Repeat Donors: New donors (51%) outnumbered repeat donors (49%) and made larger gifts on average (18.5% increase in average gift size).
Donor Advised Funds Remain a Bulletproof Strategy, According to BNY Mellon Wealth Management’s Client Activity
Donor advised funds (DAFs) continue to be an important part of the philanthropic landscape, and often are considered as the preferred option for charitable giving. According to the report, grants distributed through the BNY Mellon Charitable Gift Fund experienced a record-level gift activity in 2021, with an increase in gift count of 93%, and gift amount of 55%.
“During times of economic uncertainty when capacity for charitable giving may be limited, donors with DAFs are well positioned to provide critical funding to nonprofits when it’s needed the most,” says Thompkins. “DAFs are being used in creative estate and tax planning strategies to promote legacy, family and next generation giving, which historically have been factors in forming private foundations.”
The full 2022 Annual Charitable Gift Report, which includes additional findings from BNY Mellon Wealth Management’s Charitable Giving Study and supporting data around BNY Mellon’s Charitable Gift Fund’s record-level gift activity, is available here.
Upcoming 2022 Annual Planned Giving Conference
Crystal Thompkins will host the upcoming Planned Giving Conference on September 14, 2022, featuring an in-depth look at the 2022 Charitable Gift Report findings. The annual conference convenes charitable gift planning professionals, individuals on boards of nonprofit organizations and advisors working with nonprofit organizations for a series of keynote presentations, panel discussions, peer roundtables and insights from industry experts.
About the 2022 Annual Charitable Gift Report
BNY Mellon Wealth Management’s 2022 Charitable Gift Report assesses the philanthropic landscape, levels of giving over the past five years and donor behavior to provide insights, context, and benchmarks. This report provides analytics and observations on the charitable gift annuity (CGA) and charitable remainder trust (CRT) activity during the calendar year 2021 for 101 nonprofit organizations and the BNY Mellon Charitable Gift Fund. This includes stats related to life income or planned gifts. Organizations represented included education (56%); faith-based (20%); social services/other (14%); cultural (6%); and healthcare (4%). Data for the report is based on completed gift records in BNY Mellon’s database as of March 30, 2022.
About BNY Mellon Wealth Management
For more than two centuries, BNY Mellon Wealth Management has provided services to financially successful individuals and families, their family offices and business enterprises, planned giving programs, and endowments and foundations. It has $264 billion in total client assets as of June 30, 2022, and an extensive network of offices in the U.S. and internationally. BNY Mellon Wealth Management, which delivers leading wealth advice across investments, banking, custody, and wealth and estate planning, conducts business through various operating subsidiaries of The Bank of New York Mellon Corporation. A line of business within Wealth Management, BNY Mellon Investor Solutions includes the firm’s institutional multi-asset solutions business. The Investor Solutions AUM/AUA is $25.1bn as of June 30, 2022. For more information, visit www.bnymellonwealth.com or follow us on Twitter @BNYMellonWealth.
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SOURCE BNY Mellon Wealth Management
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