High-Net-Worth Families Cutting Back on Giving, Study Finds

High-Net-Worth Families Cutting Back on Giving, Study Finds

A new report from private wealth-research firm Prince & Associates suggests that the sputtering economy and financial meltdown on Wall Street are beginning to pinch the affluent, who are responding by cutting back on their charitable giving, Forbes reports.

In a survey of 439 high-net-worth families in late September, 73 percent of respondents, up from 59 percent in April, said they had experienced significant adverse effects from the economic downturn. And when asked about their anticipated giving in 2008, 51 percent of respondents said they planned to give less than in 2007, while 16 percent said they plan to give more.

According to the Center on Philanthropy at Indiana University, the wealthiest 3 percent of Americans account for approximately two-thirds of all household charity in the United States, so any scaling back by wealthy donors could have serious repercussions for charities. To make matters worse, wealthy individuals tend to give their largest gifts in the last quarter of the year.

"This is a tough [situation] because so many charities get support through year-end giving," said Melissa Berman, president of Rockefeller Philanthropy Advisors. "People tend to postpone their donations until the end of the year. And a lot of charities do appeals at the end of year."

Andrew Farrell. "Less Wealthy, Less Charitable." Forbes 09/26/2008.