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Young HNW Donors
Donor bases, how do you find donors, who are they?
Date: 1/28/2008 8:07:22 PM ( 16 y ) ... viewed 1545 times How to Work with Young High Net Worth Donors
From Joanne Fritz,
Your Guide to Nonprofit Charitable Orgs
The demographic profile of high net worth (HNW) donors has changed rather dramatically in recent years. First, there are more of them, and second, they are younger.
Americans in general are quite generous with 80 percent of households donating each year. Seventy-five percent of those receive no tax benefit from their donations. No other country even comes close to matching U.S. generosity.
Generosity increases as HNW increases. Ninety-five percent of families that are worth $1 million donate and when HNW increases to $5 million, 98 percent of families give regularly.
H. King McGlaughon, Jr, of Wachovia Wealth Management, made two important points in a recent webinar:
The number of households that have $1 million has increased to 10 percent of households from a mere 3.5 percent in 1989.
McGlaughon called these the "silent millionaires." They don't act rich or consume conspicuously, but they do believe in giving back to society.
High Net Worth donors are younger than ever. Thirty-four percent of HNW donors are 65 plus years old. Sixty-two percent of HNW donors are between the ages of 37 and 64.
Nonprofits often assume that large donors will be older and overlook the many younger HNW individuals our economy has created in recent years. McGlaughon points to these characteristics of younger HNW donors:
Young HNW donors have wealth that is typically "new," that is not inherited.
Young HNW donors are in their wealth and profession building years.
They are not as risk averse as their older counterparts.
They have a long horizon for planning
Their motivation is primarily mission driven, not tax-break driven. The mission here is the donor's mission, not the nonprofit's.
They are often concerned about the effects of wealth on their heirs.
They wish to protect their assets and preserve their capital.
But they want to create a "legacy," and have a sense of moral obligation to do good in the world.
Younger donors are engaged and "control centric," and are interested in targeted giving to address specific problems.
They enjoy connecting with their peers.
They often work with professionals outside the nonprofit ranks, such as financial firms and wealth management pros or even start their own foundations.
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