Philanthropy

Charitable Gift Activity Up In 2021 – BNY Mellon Wealth Management Report

Amanda Cheesley, Deputy Editor, August 17, 2022

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Despite the war in Europe, surging inflation, rising interest rates and the lingering impact of the pandemic, charitable giving neared pre-pandemic levels in 2021, a BNY Mellon Wealth Management 2022 Annual Charitable Gift Report reveals.

New York-based BNY Mellon Wealth Management has released its 2022 Annual Charitable Gift Report. The report found that charitable giving started to rebound in 2021 after declining in 2020, with the number of gifts increasing by 10 per cent, the total dollar amount of gifts increasing by 27 per cent, and the average gift size climbing by 15 per cent.

According to the report, charitable giving returned to historical, pre-pandemic trends as many non-profits found ways to discover new approaches to building support for their missions and connecting with donors.

“The financial markets held strong in 2021 and the planned giving activity demonstrated how sustainable the giving increase in 2020 was – and, even with the present market uncertainty, people don’t stop giving,” said Crystal Thompkins, head of philanthropic solutions at BNY Mellon Wealth Management.

“With the majority of planned gifts still being funded with cash, it’s important to focus on conversations about appreciated assets and ownership. There are significant opportunities for nonprofits to optimize giving by working with donors to consider non-cash gifts and craft unique gift solutions,” she added.

The report assesses the philanthropic landscape, levels of giving over the past five years and donor behavior to provide insights, context, and benchmarks, covering 101 nonprofit organizations and the BNY Mellon Charitable Gift Fund.

The report shows that gifts of more than $100,000 represented 29 per cent of the total contracts in 2021 but accounted for 85 per cent of the total gift dollars. Gifts between $10,000 and $50,000 also represented most contracts at 54 per cent, the same as in 2020, the report adds.

Meanwhile, cash gifts are still by far the most popular at 83 per cent, with non-cash gifts representing 17 per cent, nearly identical to year-over-year comparisons.

The report found that there was also a 33 per cent increase in new trust activity year over year, although total gift amounts decreased and the dollar amount of additions to trusts decreased by 50 per cent.

Thompkins stressed: “Although there was a slight uptick in the number of new trusts in 2021, trust activity continues its relatively flat to downward trend since the 2008-09 recession driven by lower charitable deductions due to the low applicable Fed rate (AFR) and donors looking to make a more immediate impact with their giving. That said, trusts are still a giving strategy that can provide solutions to both tax and estate planning needs and philanthropic goals, especially as part of a comprehensive giving strategy.”

In addition, the report found that new donors slightly outnumbered repeat donors and made larger gifts on average.

According to BNY Mellon Wealth Management’s Client Activity, donor advised funds continue to be an important part of the philanthropic landscape, and are often considered as the preferred option for charitable giving. The report shows that grants distributed through the BNY Mellon Charitable Gift Fund experienced a record-level of gift activity in 2021, with an increase in gift count of 93 per cent, and gift amount of 55 per cent.

“During times of economic uncertainty when capacity for charitable giving may be limited, donors with DAFs are well positioned to provide critical funding to nonprofits when it’s needed the most,” said Thompkins.

“DAFs are being used in creative estate and tax planning strategies to promote legacy, family and next generation giving, which historically have been factors in forming private foundations,” she added.

Thompkins will also host the upcoming Planned Giving Conference on September 14, 2022, featuring an in-depth look at the 2022 Charitable Gift Report findings, the firm said. The annual conference convenes charitable gift planning professionals, individuals on boards of nonprofit organizations and advisors working with nonprofit organizations for a series of keynote presentations, panel discussions, peer roundtables and insights from industry experts.

BNY Mellon Wealth Management, which provides services to financially successful individuals and families, their family offices and business enterprises, planned giving programs, endowments and foundations, has $264 billion in total client assets as of June 30, 2022.

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