UBS Investor Watch Explores America's "Giving Gene"; 91% of American Millionaires Engage in Charity Annually

However, most wealthy investors not confident about the impact of their giving -- only 20% of millionaires rate their giving approach as highly effective

NEW YORK--()--UBS Wealth Management Americas (WMA) today released its quarterly UBS Investor Watch report, "Doing well at doing good," revealing the giving habits of wealthy investors. In spite of the recent economic uncertainty, America's "giving gene" remains intact, and donations of money have actually increased. In the last decade, 36% of millionaires have increased their donations, while few (9%) have decreased them. The survey of over 2,200 high net worth (HNW) and affluent U.S. investors revealed that approximately 9 out of 10 millionaires (91%) engage in philanthropy each year. Millionaires typically give 7% of their annual income to charity, and the majority (52%) plan to leave at least some of their wealth (28% on average) to charity when they pass away. Almost 4 in 10 millionaires have given at least $100,000 in their lifetime, and nearly three-quarters gave at least $25,000.

UBS Investor Watch found that while millionaires highly value charitable giving, they are not confident about the impact of their giving. Only 20% of millionaires rate their giving approach as highly effective, and only 41% are highly satisfied with the impact they have made on their broader communities and society. Surprisingly, millionaires often do not plan their charitable giving. Instead, they generally take a haphazard approach, donating to charities reactively, upon request. Almost a quarter (23%) of millionaires decide how much they can afford to give as individual solicitations come in, and only 9% engage in planning for their philanthropic giving.

The survey found that investors with at least $5 million in assets are much more likely to rate their giving approach as highly effective (35% vs. 20% for investors with less than $5M), and to be satisfied with their impact on broader society. But it is not because they donate more money. These investors are more likely to use financial planning tools for philanthropy and to assess the impact of their donations. Millionaires with less than $5M who use these strategies also tend to be more satisfied with their approach to giving and impact on society; 47% are highly satisfied when using financial planning tools vs. 32% when not using them.

"While it is clear that America truly has the 'giving gene', the whole point of giving is to make an impact; yet few millionaires believe they are actually doing so. The majority are engaged in reactive, 'checkbook philanthropy' that is not strategic and not part of a broader financial plan," said Paula Polito, Client Strategy Officer, UBS Wealth Management Americas. "What we found is that investors with over $5 million are more satisfied and effective givers, but not because of their ability to give a high dollar amount; rather, it’s because of the strategic planning they put into their philanthropic giving. Investors below $5 million would do well to replicate this planned approach to giving.”

UBS Investor Watch found that generational and gender differences drive the giving habits of wealthy investors.

Giving Differences by Generation: Passion vs. Duty

Overall, HNW and affluent investors most frequently donate to organizations helping the less fortunate (55% in the last year), supporting religious organizations (42%) and fighting diseases (41%). Older generations (Boomers / WWII Generation), however, tend to give more to traditional institutions, such as their alma maters and religious organizations, while younger generations (Gen X / Millennials) gravitate toward causes focused on practical outcomes, such as fighting diseases and kids programs. Millennials are particularly passionate about the causes they support (38% for Millennials vs. 32% for Boomers / WWII Generation), while older generations more frequently cite a sense of duty as the key reason for their philanthropy (70% for Boomers / WWII Generation vs. 48% for Millennials).

Millennials, in general, prioritize giving as a personal goal. They are more likely to think of themselves as philanthropists compared to older generations (26% for Millennials vs. 18% for Boomers). Millennials are also engaging with philanthropy differently. They are more likely than any other generation to have given to a new organization in the last year, and to respond to, as well as make, social media requests for donations. They also lead the way in aligning their wealth with their values by engaging in values-based investing, and making buying and career decisions based on their core values.

Giving Differences by Gender: Women Lead the Way in Philanthropy

Similar to Millennials, women as a group are also very passionate about philanthropy, viewing it as a more important personal goal, and are more focused [than men] on spreading awareness for their causes. They are also more likely to align their wealth to values than men: Almost a third of women (32%) have engaged in values-based investing (vs. 20% of men), and they are more likely to choose their careers based on social values (26% vs. 16% of men).

Women are highly engaged in philanthropic giving, and are more likely than their male counterparts to volunteer their time (67% of women vs. 57% of men) and make household decisions on which charities to support. They are also more likely to say that they wish they had the ability to give more (45% of women vs. 36% of men).

“Millennials’ and women’s passion for, and commitment to, philanthropy bodes well for the future,” said Sameer Aurora, Head of Client Strategy at UBS Wealth Management Americas. “Both groups are increasing their wealth through earnings and inheritance–according to industry studies, women are expected to control two-thirds (67%) of wealth in the U.S. by 2030–which will undoubtedly lead to greater philanthropic giving and values-based investing. With more active planning, women and Millennials will have an even stronger impact on society, as well as improve their own sense of contribution toward a better world.”

Volunteering and Involving Family Leads to Greater Satisfaction

In terms of volunteering, millionaires are usually motivated to do so for similar reasons as donating money. In fact, 66% feel that dedicating their time is equally valuable to a charitable organization as giving money. The main difference between the two practices is that volunteering tends to evoke stronger feelings of satisfaction than giving financial donations. According to UBS Investor Watch, more investors (50%) feel highly satisfied with their impact on their communities when they volunteer, rather than solely donating money (26%). Consequently, 65% of volunteers do so at least once a month, while more than a quarter (28%) volunteer once a week.

We invite you to read the full report here: www.ubs.com/investorwatch

About UBS Investor Watch

UBS Investor Watch is a quarterly publication analyzing the latest in investor sentiment and behavior. Dedicated to generating insights that help UBS Financial Advisors deliver exceptionally for their clients, UBS Investor Watch is the industry’s definitive guide to what’s on investors’ minds right now.

We invite you to read the full report.

Methodology

For this ninth edition of UBS Investor Watch, 2,210 U.S. investors responded to our survey from September 17 – 25, 2014. The core sample of 1,372 investors have at least $1 million in investable assets. This UBS Investor Watch includes an oversample of younger generations:

  • 530 Gen X: Respondents ages 37 – 49 who have at least $250,000 in investable assets
  • 529 Millennials: Respondents ages 21 – 29 who have at least $75,000 in household income or $50,000 in investable assets; respondents ages 30 – 36 who have at least $100,000 in household income or $100,000 in investable assets
  • With 93 survey respondents, we conducted qualitative follow-up interviews

Notes to Editors

About UBS Wealth Management Americas

UBS Wealth Management Americas provides advice-based relationships through Financial Advisors who deliver a fully integrated set of products and services specifically designed to address the needs of ultra-high net worth, high net worth and core affluent individuals and families. It includes the Wealth Management U.S. business, the domestic Canadian business and the international business booked in the United States.

About UBS

UBS draws on its 150-year heritage to serve private, institutional and corporate clients worldwide, as well as retail clients in Switzerland. Its business strategy is centered on its pre-eminent global wealth management businesses and its universal bank in Switzerland. Together with a client-focused Investment Bank and a strong, well-diversified Global Asset Management business, UBS will drive further growth and expand its premier wealth management franchise.

UBS is present in all major financial centers worldwide. It has offices in 57 countries, with about 35% of its employees working in the Americas, 36% in Switzerland, 17% in the rest of Europe, the Middle East and Africa and 12% in Asia Pacific. UBS employs about 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange and the New York Stock Exchange (NYSE).

Contacts

UBS
Media Inquiries
New York: Gregg Rosenberg, 212-713-8842
Follow us on Twitter: @UBSAmericas

Contacts

UBS
Media Inquiries
New York: Gregg Rosenberg, 212-713-8842
Follow us on Twitter: @UBSAmericas