Ninety percent of multi-millionaires contributed to philanthropic causes in the last year – but the way individuals chose to donate was closely linked to how they initially acquired their wealth, a recent Bank of America Institute report revealed.
The analysis, which polled 1,007 people with investable assets over $3 million, revealed that self-made millionaires were more likely to give directly to charity than their generationally wealthy counterparts.
The report places wealthy people into one of three categories – legacy, head start, and self-made. People in the legacy wealth category were raised in affluent settings and received inheritances, while self-made people were middle class or poor and received no inheritance. People in the head start category either grew up upper-middle class with no inheritance or middle class with some inheritance.
“While the commitment to giving back is nearly universal, there are differences in the ways that groups of wealthy people express that intention,” the report read.
“Legacy wealth people, particularly the younger crowd, have more direct involvement with charitable causes in the forms of fundraising and mentoring. Self-made people put more focus on direct giving.”
Ninety-three percent of self-made people reported that they give direct financial contributions to philanthropic causes, compared to 89% of those with a head start and 74% of those with legacy wealth. Conversely, 21% of those with legacy wealth engage in fundraising compared to 13% of both self-made individuals and people with head starts.
There were, however, some philanthropic practices that transcended demographic categories.
“Across backgrounds and age groups, wealthy people show similar inclinations toward volunteering — about 40% of people — and sitting on boards — about 10% of people,” the report read.
Regardless of how they acquired their wealth, older people were more likely to make direct financial contributions. Ninety percent of people 44 or older engaged in direct giving, compared to 49% of those between the ages of 21 and 43.
Fundraising and mentorship both skewed younger — with a quarter of those under the age of 44 saying they mentored people, compared to 6 percent of people in the 44+ category.
The survey also indicated that older people were skeptical of their younger counterparts’ ability to engage in effective philanthropy.
“Only 50% agree that the next generation is prepared to take on and support charitable causes,” the report read. “They’re even less convinced that the next generation will be more effective in philanthropy than they are, though younger people are quite assured of their abilities.”