Exclusive National Opinion Poll

How We Give: The Impact of Retirement on Charitable Giving

Americans have a long tradition of charitable giving, which is one reason the United States ranks as the most generous country. But what happens when we retire and no longer have a steady paycheck, especially during times of economic uncertainty? Do our giving habits change?

To find out, we surveyed donors ages 55 and older about their charitable giving habits before and during retirement. Even with high inflation, volatile markets, and a global pandemic, survey respondents plan to give.

How much we give

The majority of retirees (53%) donate the same amount as they did while working, while 21% give more and 25% donate less.

But many pre-retirees anticipate that retirement and the loss of a regular paycheck will have a negative impact on future giving.*

41% Expect to give less when retired

8% Expect to give more

52% Will maintain the same level of giving

How much we donate each year

40% Give up to $999

37% Give $1,000 to $4,999

$2,480 Retirees’ median donation

$1,636 Pre-retirees’ median donation

How uncertainty influences our habits

About 7 out of 10 say they plan to donate the same as usual despite inflation hitting 40-year highs and the wild swings in stock prices. These factors, though, may cause 1 out of 4 to give less.

How the pandemic has shaped donations

Since the start of the pandemic in 2020:

Donate more

19% Pre-retirees

14% Retirees

Donate the same

68% Pre-retirees

62% Retirees

Donate less

12% Pre-retirees

24% Retirees

The pandemic has also influenced the types of charities we give to. Twenty percent of donors make a point of giving to organizations that help with basic living and health care needs, while almost as many (18%) donate more often to local groups.

Top 3 reasons for increased contributions*

39% Finances remained strong so donors can afford to give more

33% Saw greater local need for assistance

12% Saw a growing need in other countries and give to international groups

1 out of 10 Used stimulus checks to increase donations

Top 3 reasons for decreased contributions*

51% Deteriorating household finances

21% Providing more support for family or friends

10% Donor fatigue

1 out of 10 Used money instead to patronize local businesses and support service workers

Most popular charities since 2020, in order*:

1. Human services (food banks, family services, homeless services)

2. Health organizations (medical research, treatment and preventive services)

3. Animal welfare and wildlife conservation

4. Religious activities

5. Community development

How we choose*

29% Conduct research on the effectiveness of groups involved in work that interests the donor

24% Stick with the same charities they or their families traditionally support

19% Choose local nonprofits

Why we give*

A tax break is a motivating factor for only 9% of donors. Top reasons for giving:

31% Believe in the charity’s mission

28% It feels good to help others

14% It’s part of their faith

9% Set an example for family

Benefits of giving to charity

Improves your community when you give locally

Provides support to causes you believe in

Can lower your tax bill

Sets an example for younger generations of your family

It’s good for your health, lowering stress and high blood pressure

Spending on others creates greater happiness

Promotes social connections and a sense of purpose

Ways we give

An overwhelming 80% donate via cash or check. Few take advantage of tax friendly strategies, such as donating appreciated securities, giving via a Qualified Charitable Distribution from an IRA or through a donor-advised fund.

Yet donor-advised funds—charitable investment accounts— are the fastest growing vehicles for giving. People who use them cite these fund features as being somewhat or very important to them:

Being able to take a larger upfront tax donation by "bunching" multiple years of gifts into a single donation to the donor-advised fund

Tax-free growth of money invested in the fund

Encourages philanthropy among family members

Option to delay charitable gifts

Ability to contribute a range of assets, from stocks to cryptocurrency

KIPLINGER LOGO

© December 2022