SWRI'S PHILANTHROPIC ADVISEMENT SERVICES
SWRI director Paul G. Schervish, Senior Research
Associate John J. Havens, and Director of Publications
Mary A. O'Herlihy regularly consult and conduct
presentations, seminars, and workshops for wealth
holders, financial advisors and financial
institutions, foundations and other nonprofits on the
findings and implications of statistical and interview
research on wealth and philanthropy.
To find out more about our philanthropic advisement
services to individual, corporate, and nonprofit clients
visit our website /swri or call us
directly at (617) 552-4070.
Learn more about SWRI's Philanthropic Advisement Services
I am pleased to send you the second issue of a periodic
update on our research at the Social Welfare Research Institute
on wealth and philanthropy.
This issue focuses on the material forces that make up
"the new physics of philanthropy," namely the supply-side
vectors inclining wealth holders to use their wealth on
behalf of the commonwealth.
Our research indicates that several identifiable forces
affecting wealth holders are changing the supply-side or
donor-side of philanthropy. These changes constitute a new
physics of philanthropy.
The new physics entails an innovative way of thinking,
feeling, and acting in regard to philanthropy. In the new
physics, wealth holders seek out rather than resist greater
charitable involvement approach their philanthropy with
an entrepreneurial disposition, and make philanthropy a
key ingredient of the financial morality they observe and
impart to their children.
We hope "Wealth and the Commonwealth" will help provide
some added meaning and practical benefit for you in your
good work. If you would like to be removed from our mailing
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in the subject line.
Paul Schervish, Director, SWRI
|THE NEW PHYSICS OF PHILANTHROPY|
| ||In this issue we focus on part 1 of a two-part article on
the supply-side vectors of charitable giving which
analyzes the emerging financial and social-psychological
forces that are increasingly
influential in shaping philanthropy, especially by
wealth holders. By referring to the new physics of
philanthropy, we emphasize the increasing importance of
material wealth and the desire to be efficacious in the
commonwealth as supply-side factors, that is, as vectors
actually inclining wealth holders toward a more steadfast
commitment to philanthropy.|
In Part 1, The Material Side of the Supply Side, we
integrate the new physics and the economic
context of supply and demand for philanthropic funds.
Specifically, we focus on what it means to speak about
supply-side vectors and on empirical evidence for the
material vectors of the new supply-side physics of
philanthropy. Since the 2001 publication we have
UPDATED TABLES and TEXT on trends and projections of
charitable giving and make them available here.
Download Complete Paper "The New Physics of Philanthropy: The Supply-Side Vectors of Charitable Giving. Part 1: The Material Side of the Supply Side." Also download updated trends and projections for charitable giving.
|The Physics of Demand and Supply|
| ||Until just recently, the usual approach to fundraising was
to consider wealth holders as relatively reluctant givers.
In order to overcome this reluctance, fundraisers and
others promoting charitable giving employed a panoply of
strategies ranging from cultivating friendships and
presenting portfolios of needs, to advising about tax
incentives, instilling guilt about privilege, making
accusations of meanness, and establishing giving quotas
for wealth holders.|
In looking at the supply side of philanthropy, we explicitly
consider how the growth in the material capacity of
donors generates a substantial increase in both the
material and the moral inclination of wealth holders to
donate to charity.
Moving from a demand-side to a supply-side approach to philanthropy
|Current Trends in Inter-Vivos and Bequest Giving|
| ||How much do the wealthy give to charity as a
percentage of income and wealth? The small number of
families at the highest end of the distributions of wealth
or income currently contribute a dramatically high
proportion of total annual or inter-vivos charitable giving.
The 4.9% of families with net worth of $1 million or more
made 42% of the total contributions to charitable
organizations in 1997. We have also made available
COMPLETE TABLES FOR 1997 GIVING BY INCOME AND
How are final estates distributed between heirs, taxes,
and charity? Although there is a negative correlation
between wealth and percentage of wealth contributed in
the form of inter-vivos gifts, there is a positive
correlation between wealth and percentage of wealth
going to charity in the form of charitable bequests made
from final estates (that is, estates for which there is no
surviving spouse). For final estates recorded in 1997 the
average donation to charity was 14%. For estates
valued under $1 million, 4% was contributed to charity.
DATA AND ANALYSIS NOW ALSO AVAILABLE FOR 1999.
Learn more about the trends in charitable giving in life and at death
|$41 Trillion Wealth Transfer|
| ||Based on a wealth-transfer microsimulation model
developed at SWRI we estimate that over the 55-year
period from 1998 to 2052, with a conservative 2%
secular growth rate, the intergenerational wealth
transfer will be $41 trillion, and may well reach double or
triple that amount.|
Of the $41 trillion we estimate that $6 trillion will be
transferred to charities. If the economy grows at 4%
over that same period bequests to charity could well
reach $25 trillion.
Download wealth transfer projections
|Projections for Charitable Giving|
| ||The findings reported above about the top-heavy
distribution of charitable giving, when coupled to our
projections for growth in wealth and income over the
next twenty years, indicate that substantial amounts of
charitable contributions will be made by the affluent over
that period, and explain why there is such growth in the
charity procurement industry's efforts to target wealth
UDATED PROJECTIONS RECENTLY RELEASED:
Based on our most recent estimates, at a 2% growth
rate, charities stand to receive $6 trillion in bequests and
$13.2 trillion in inter-vivos giving between 1998 and
2052. Of this $19.2 trillion total, we estimate that 52%
will be contributed by millionaires.
our Projections for Wealth Transfer and Charitable Contributions
|"RESEARCHER FINDING NOT ALL RICH HAVE WEALTHY ATTITUDES"|
| ||May 27, 2000--The LA Business Journal published an
interview with Paul Schervish, Director of the Social
Welfare Research Institute.|
Question: Describe the so-called millionaire next door.
SCHERVISH: There has always existed, in addition to
is understood as the very wealthy, a group of
upper-echelon individuals. Andrew Carnegie defined the
truly wealthy as those who would remain able to
continue to live at the standard of living to which they
had become accustomed. He called the other group the
"economically competent," competent to pretty much
fulfill their wishes economically but not fortified against a
major economic downturn, in which they would be
reduced to the middle class. The group you're talking
about is hard to define as either one or the other;
perhaps they're something in between.