Studies Abound. What Do They All Mean?

Over the past couple of month so many studies, research reports and survey results pertaining to the fundraising landscape have filled my inbox that it’s getting hard to process all this great data!  Here is just a sampling of those that peak my interest:

Capgemini and Merrill Lynch Global Wealth Management published their 2011 World Wealth Report. According to this study, individuals with investable assets of US$1 million or more (excluding primary residence, collectibles, consumables, and consumer durables) grew significantly in 2010, surpassing the pre-recession numbers the study recorded back in 2007.  In total, there are 10.9 million individuals around the world in this population, a jump of 8.3% over last year.  And, it’s not just a jump in people.  Financial wealth for this group grew 9.7% to $42.7 trillion.  Of these individuals, more than 28% (3.1 million) live within the United States.  Also notable was that the subset of individuals with a net worth of $30 million or more grew more than 10%.

While wealth at the top continues increase, the American Pulse Survey, conducted by BIGresearch®, found that most Americans are not expecting pay raises over the next year.  With costs for staples such as food and gas rising, Americans are planning to cut back on expenses by focusing on necessities and are preparing for fewer discretionary dollars.

Similarly, Digitas released a proprietary study called Affluence in America: The New Consumer Landscape.  This study reports that households with an income of $100K-$199K, which used to classify themselves “affluent” now mostly consider themselves “middle-class” and feel as though they have significantly less spending power than they used too.  Instead, “affluence” does not truly start until a home reaches the $200K income threshold.

The Digitas study also identified an “emerging affluent” pool of those under the age of 35, yet already earning $100K-$199K per year.  This group, a subset of the Millennials and younger Generation X populations, is assumed to be tracking toward true “affluence” and tend to have attitudes more closely aligned with the already affluent.

Speaking of the Millennials, a recent article in Fundraising Success magazine called The Future of Fundraising: What a Difference Five Years Will Make notes that even though the Millennials only represent 5% of the nation’s personal income today, with so many Baby Boomer retiring, by 2016 the Millennials will represent 55%!  The article continues to suggest that while the Millennials may not be your organization’s bread-and-butter donors today, engaging this generation as friends, volunteers or lower dollar donors today will help you set the stage for future fundraising.

And, what is one of the ways to engage Millennials?  Social media, of course!  Academic Impressions had a piece on their website recently titled Social Media: Targeting Your Content confirming that while social media can be highly effective for non-profits, we also have to be careful not to over saturate our content.  As in many things, quality, it turns out, is more important than quantity.

Not to brush off the Baby Boomers too quickly, Charity Village released a report on Envisioning & Investing in Legacy and Bequest Opportunities indicating that most nonprofits are not investing enough in gift planning and legacy giving strategies.  This means that they are not strategically positioned to benefit from the intergenerational transfer of wealth that is expected to occur as the Baby Boomers pass on.

And, last but not least, I would be remiss to not mention Giving USA 2011, which was released last month.  Key findings include that despite the challenging economic conditions, giving by Americans remains relatively stable each year, hovering at just about 2% of personal income for decades.   The study also found a year-over-year increase in giving between 2009 and 2010, which is a positive change from the past two years’ reports of significant decreases.  And, to piggyback on Charity Village’s study, Giving USA found that bequests rose 18.8% last year, making it the giving source with the largest jump since 2009.  Giving USA also notes that IRS data indicates that 1 in 5 estates in 2010 included a deduction for a chartable bequest.

Now that I’ve cleaned out my inbox from all of these studies, what does it all mean?  Admittedly, it is hard to synthesize so much information into one clean, succinct paragraph.  Here’s my attempt:

While the definition of what defines affluence is getting stricter, the very wealthy continue to get wealthier and larger in numbers.  Yet, the remaining mass of the population continue to make tough choices regarding their personal finances.  The recession is over, and it looks like giving is starting to rebound, but consumer confidence and personal income are likely going to continue to affect charitable giving.  Two key generations to pay attention to are the Millennials, who are quickly going to become a prime market for charitable giving, and the Baby Boomers, whose intergenerational transfer of wealth could provide a significant revenue stream for non-profits in the coming years.

I encourage you to check out these studies for yourself!  They are chock-full of information beyond the quick ‘sound bites’ I’ve pulled out for this posting.  Happy reading!

Melissa Bank Stepno is a consultant for Target Analytics. You may reach her at [email protected].