Mature couple sitting on jetty, relaxing at the sea

Each year as fall arrives, many wealthy families and individuals turn their attentions to charitable giving.

Donors – seasoned philanthropists as well as those just starting out – will be best served if they keep in mind: The most effective and satisfied philanthropists know what they want to achieve and, just as importantly, why they wish to achieve it.

J.P. Morgan client survey

A recent survey of U.S.-based ultra-high net worth people shows the multiple – and diverse – reasons many wealthy individuals have for their philanthropy:1

  • 41% said they felt a “duty” to give back
  • 38% cited the personal satisfaction they derived from sharing their wealth
  • 38% gave to support sustainable change for causes that matter to them
  • 38% supported causes or organizations with which they felt a personal or emotional connection. This included donating to groups that are religion-based. Clients 50 and older most often gave this response
  • 26% of younger clients said gaining recognition for their contributions was a top priority
  • 19% of all survey respondents said tax planning benefits figured into their charitable giving activities

Answering the three questions below can help you clarify your motives and prioritize your goals.

What motivates you?

People donate time, money and resources for various and deeply personal reasons.

Do you seek recognition – a grand gala, a simple thank-you note, your name on a building? Will you simply send a check, or do you want to get deeply involved in an organization’s efforts? Is your preference to take a backseat in programs you underwrite, but actively encourage family members’ participation?

It is not being selfish to want to feel good about what you are doing – or to be recognized for it.

For example, for one young J. P. Morgan client, hands-on involvement was essential. 

While in her twenties, she traveled to the village in Brazil where her grandfather, a geologist, was born. Initially, she hoped to learn more about her family lineage. Her quest soon became something more. Instead of returning to New York, she accepted an invitation to volunteer at a local nonprofit that partnered with indigenous people to conserve biodiversity and fortify local ecosystems and culture.

Over time, that work helped make her a respected leader in the field. Today, she is also a knowledgeable guide to her family’s philanthropic interests in preserving the world’s rain forests.

Are you realistic about what your philanthropy can accomplish?

Many people give in order to have a beneficial impact: on a community, a targeted group or the world at large. But before diving in, carefully consider how you will measure success.

While it is admirable – and certainly exciting – to have big goals, a best practice is to break down big ambitions into smaller, more attainable parts, as these:

  • Are more feasible and practical to achieve
  • Allow us to recognize progress and feel some impact
  • Satisfy our need for completing tasks and getting results

For example, no one individual can stop the ill effects of climate change. However, funding programs that lower carbon emissions, develop new technologies or plant trees can lead to meaningful – and measurable – environmental improvement.

Have you defined a clear timeframe?

Many people want to see results of their giving during their lifetimes. Is that important to you? Or are you willing to fund initiatives that pay off far into the future?

For example, individuals who donate to medical research generally accept that they may not live to see programs they support bear fruit. However, you don’t have to abandon the field to have a more immediate impact, such as by endowing a position or building a research facility that bears your name.

Why we give

Philanthropy generally is motivated by a desire for:

  • External (extrinsic) rewards, such as reaping financial gains, saving on taxes or avoiding punishment
  • Internal (intrinsic) meaning, including recognition, reputation, community impact, progress, and personal growth and satisfaction

Both are equally important. But the second group is often neglected.

How do you feel about your giving? Does your support bring you joy or frustration? Does it make you hopeful for the future, or do you feel as if you still are not doing your part? Are you proud of what your money is helping to achieve?

When your philanthropic efforts have a positive impact on you and your family members, you are all more likely to remain engaged, and to work together to express your shared vision and values.

We can help

There are many reasons to give, all of them equally valid. So what does having a personally rewarding impact look like to you?

Your J.P. Morgan advisor is ready to help you weigh your options, focus on priorities, get comfortable with your decision making and provide resources that can help deepen your knowledge.

References

1.

J.P. Morgan conducted an online survey of 311 U.S. clients in March 2023. Those polled were 21+ years of age, had $10+ million in investable assets and had donated $1,000+ to charity in the last 12 months.

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