The 2008 Bank of America Study of High Net Worth Philanthropy Issues Driving Charitable Activities Among Affluent Households

The 2008 Bank of America Study of High Net Worth Philanthropy Issues Driving Charitable Activities Among Affluent Households April 20, 2010 Ramsay H. Slugg Senior Vice President National Wealth Strategies Group U.S Trust, Bank of America Private Wealth Management 2010 Bank of America Corporation, N.A. All rights reserved. AR74225

The 2008 Bank of America Study of High Net Worth Philanthropy was researched and written by The information provided is based on the Bank of America Study of High-Net-Worth Philanthropy, researched and written by The Center on Philanthropy at Indiana University. Bank of America cannot confirm or guarantee the accuracy or completeness of the analysis provided in the study. Key findings referenced do not represent the entire findings in the study. Always consult with your independent attorney, tax advisor, investment manager and insurance agent for final recommendations and before changing or implementing any financial, tax or estate planning strategy.

Survey Methodology The study s main purpose is to understand the philanthropic patterns of high net worth households. A 12-page survey was fielded to 20,000 high net worth households between July 2008 and August 2008. Any household with an income of more than $200,000 or a net worth of more than $1,000,000 (excluding the value of their home) was included in the study. In addition all respondents must have their primary residence in the United States. The total number of respondents to the survey was 840. The response rate for this survey is 4.3%. After excluding those households that did not qualify because of their income or wealth, the final sample was 680 responses for this report. Except when specifically referred to otherwise, all giving percentages and amounts outlined in this report represent aggregate giving figures, which combine both direct contributions and any grants or distributions from a donor's private foundation, donor-advised fund, or charitable trust made in 2007.

4 Giving Patterns, 2005-2007

Percentage of High Net Worth Households that Gave to Charity in 2007, Compared to the U.S. General Population Source for the U.S. general population is the Center on Philanthropy Panel Study 2005 wave, the latest year available. High net worth figures are for 2007 aggregate giving. *** Statistically different at the p<0.001 level 5

Average Giving by Income, 2005 and 2007 * May not be statistically meaningful because the sample contains fewer than 50 respondents. *** Statistically significant difference (p<.05) from 2005 to 2007. 6

Average Giving by Wealth, 2007 7 Note: * May not be statistically meaningful because the sample contains fewer than 50 respondents. *May not be statistically meaningful because the sample contains fewer than 50 respondents.

Average Donations as a Percentage of Income, 2005 and 2007 8 *May not be statistically meaningful because the sample contains fewer than 50 respondents.

Average Donation Amounts to Charitable Subsectors, 2005 and 2007 Charitable giving for 2005 was adjusted for inflation to 2007 dollars. "Giving vehicles" include gifts to a donor's own private foundation, charitable trust, or donor advised fund. 9

Percentage of Direct Donations to Charitable Subsectors in 2007, High Net Worth Donors vs. the General Population "Giving vehicles" include gifts to private foundations, charitable trusts and donor advised funds. Source for the U.S. general population is the Center on Philanthropy Panel Study 2005 wave, the latest year available. High net worth figures are for 2007 direct giving only. 10

11 Demographics of Donors, Characteristics of Their Charitable Giving

Average Donations by Region of the US, 2005 and 2007 * May not be statistically meaningful because sample contains fewer than 50 respondents. 12

Geographical Distribution of Giving by High Net Worth Households with Secondary Residences, 2007 13

Average Donations By Employment Status, 2007 14

Average Giving by Primary Source of Net Worth, 2007 * May not be statistically meaningful because the sample contains less than 50 respondents. 15

Objectives of Largest Gift in 2007 16

How Donors Gave and How They Plan to Give 17

Primary Resources that High Net Worth Households Use to Get Information about Not-for-Profit Organizations 18

High Net Worth Households that Currently Have or Would Consider Establishing a Charitable Giving Vehicle Currently Have Would Consider Establishing in 3 Years Will with Charitable Provision 55.9 37.0 Endowment Fund 26.5 20.0 Charitable Remainder or Lead Trust 17.3 20.9 Private Foundation 13.9 15.0 Comm. Fdn. Donor-Advised Fund 10.4 10.5 Bank Donor-Advised Fund 10.2 10.2 Charitable Gift Annuity 8.4 17.2 0 20 40 60 80 100 19

Wealthy Households that Consulted Others when Making Charitable Giving Decisions by Type of Person Consulted, 2005 and 2007 # 2005 data not available, * 2007 data not available. 20

The Influence of Family and Religion, The Importance of Volunteering

Transmitting Philanthropic Values: How Children Learn about Giving 22

Transmitting Philanthropic Values: The Role Children Play in Charitable Giving DAF is Donor-Advised Fund 23

Transmitting Philanthropic Values: Average Giving by Role Children Play in Family Philanthropy, 2007 * May not be statistically meaningful because the sample contains less than 50 respondents. 24

Total, Secular, and Religious Average Donations by Frequency of Religious Attendance, 2007 *May not be statistically meaningful because the sample contains fewer than 50 respondents 25

Percentage of Donors Who Volunteered by Hours Volunteered, 2005 and 2007 Statistically different at * p<0.05 ** p<0.01 *** p<0.001 levels 26

Percentage of High Net Worth Individuals Volunteering for Different Activities, 2005 and 2007 27 *** Statistically different at the p<0.001 level. ^ "Other" was not a choice in the 2005 questionnaire.

Comparing Average Donations to Total Hours Volunteered, 2005 and 2007 28

29 Philanthropic Motivations and Expectations

What Motivates Donors to Give 30

What Donors Expect from the Organizations They Support 31

How Donors Believe Their Giving Impacts Society, Charities, and Their Own Quality of Life 32

Number of Organizations Donors Stopped Supporting in 2007 33

Why High Net Worth Households Stopped Supporting these Organization(s) 34