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Did You Know that 1% of Families Contribute 26% of Charitable Dollars?
The small number of families at the highest end of the distributions of wealth or income currently contributes a dramatically high proportion of total annual or inter-vivos charitable giving. There are three ways to document this finding: by income, by wealth, and by income and wealth jointly.
The 0.4% of families with incomes of $1 million or more contributes 16% of charitable dollars; the 1% of families with incomes over $500,000 makes 26% of total charitable contributions; the 5% of households with incomes around $175,000 or more gives about 45% of total charitable dollars; the 7% of households with incomes above about $140,000 contributes half of all charitable contributions; and the 25% of households with incomes above $70,000 is responsible for 70% of charitable giving.
When we look at giving as it relates to wealth, we find very similar relationships, with 0.4% of families (those worth $10 million or more) contributing 21% of charitable dollars; the 1% of families with net worth above $5 million responsible for 28% of the total; the 5% of wealthy families with a net worth of $2.5 million or more contributing 40% of the total; 7% of the wealthiest households (those worth $1 million or more) giving half of all charitable dollars; and the top 25% of households (those worth $250,000 or more contributing 75% of the total charitable giving.
In terms of giving by income and net worth, families worth $1 million or more, which have annual incomes of $1 million or more [one third of one percent (0.34%) of families] contribute 16% of all giving.
Easy rules of thumb for giving in relation to income can be inferred from these findings, with the richest 0.04% of households giving approximately 16% total contributions (0.04:16), in addition to the 1:25, 5:45, 7:50, and 25:70 rules. For wealth, the guidelines are similar: 0.04% gives 21%, as well as the 1:28, 5:40, 7:50, and 25:75 proportions.
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