Fidelity Charitable research finds many unaware of the full range of ways to give to charity

BOSTON, April 12, 2016 – Most charitable donors surveyed in a new study conducted by Fidelity Charitable do not know about the range of available giving options, including writing a charity into a will, donating appreciated securities, or using a donor-advised fund. "Our research uncovered remarkably low awareness and use of the full range of tax-advantaged giving methods," said Matt Nash, senior vice president of donor engagement at Fidelity Charitable. "This giving gap may limit potential savings and prevent people from giving more to the deserving charities they support."

The survey asked affluent and high net-worth donors¹ to indicate their familiarity with and use of nine different charitable giving methods,² and explored how annual gift size, wealth, age, and advisor relationships affected awareness and use. Of those surveyed, 92 percent said that charitable giving is equally or more important to them than other financial priorities. Despite that common commitment to giving, about half said they donate financially to charity using only cash, checks, or credit card payments. Most did not know about the range of giving options available to them.

That lack of knowledge translates into low use. While nearly 80 percent of those surveyed owned appreciated assets, such as stocks, mutual funds or bonds, only 21 percent had ever contributed those assets to charity. While nearly 90 percent of donors had a retirement or life insurance plan, only 9 percent had named a charity as a beneficiary of the plan. Among the factors that influenced awareness and use levels:

• Retirement status. Retirees give to more charities than those working full time, but they are less likely to report they are confident they can give at the same level in the future—and also less likely to be using a giving vehicle. For example, just 39 percent of retirees are using methods such as donating appreciated securities or a distribution from an IRA, compared to 50 percent of those working full time.
• Age. Charitable donors under age 50 are much more likely to use more efficient charitable giving methods than their older counterparts, despite their lower overall wealth.
• Going with a pro. Fifty-three percent of charitable donors have discussed charitable planning with an advisor. While those who have done so are more likely to understand the greater variety of charitable giving vehicles available, they are not any more likely to put this knowledge to use in their giving practices.
• Gift size. Those who give a significant amount – more than $20,000 to charity each year – are also those most likely to know about and make use of giving methods beyond cash, credit card and check. Even so, a quarter of these donors are not using any of these giving methods.

“Frankly, we were surprised to uncover this awareness gap. Americans have a strong commitment to philanthropy, but those who give have varying understanding of the range of ways they can support their favorite causes,” said Brian Deacy, national fundraising manager for Fidelity Charitable. “While advisors are doing a good job discussing charitable planning, there is certainly ample opportunity for them to add value by helping educate their clients about the smartest ways to give.”

Learn more about charitable giving methods

There is a broad range of charitable giving methods available to donors. Using specific giving methods may make planning easier. Others may help create tax savings, and some giving methods may enable donors to give more to the charities and causes they care about. Donors, nonprofits and advisors can benefit from the results of this survey, which show that:

• Donors should speak with an advisor to discuss the range of vehicles or options available and how they might fit into their broader financial plans, particularly as they begin planning for next year.
• Nonprofits should consider helping their most valuable donors understand the variety of assets that can be donated and vehicles that can be used in order to maximize their opportunity with those donors.
• Advisors have an opportunity to bridge the gap between understanding and use of different giving strategies. Doing so may help clients at all levels understand the benefits of using a range of strategies and vehicles to fund their giving.

Download The Giving Gap report.

¹ Based on a survey of 950 donors who give to charity, conducted 2015-2016. The surveys were conducted by W5, an independent research firm. The percentages reported exclude donor responses of NA/Unsure. Questions about understanding of charitable giving vehicles, time spent on charitable giving, charitable budgeting, importance of charitable giving compared to other financial priorities, and ability to give in the future were all asked to half of the base sample.

²The nine methods offered in the survey were: bequests, or leaving money to charity in a will; donating appreciated assets, such as securities or real estate; family foundations or private foundations; donor-advised funds; naming a charity as the beneficiary of a retirement or life insurance plan; charitable trusts, such as a charitable lead trust or a charitable remainder trust; charitable gift annuity; community foundations; and making a qualified charitable distribution from an IRA.