Philanthropic Giving is a Family Affair

Atlanta, August 25, 2008 /PRNewswire via COMTEX/ — Charity truly begins at home, according to a new survey. SunTrust Bank Private Wealth Management released a study that finds families play a vital role when business owners seek to match money and meaning. SunTrust surveyed more than 200 high net worth business owners, whose companies have at least $10 million in annual revenue, and determined that seven in ten (72%) business owners surveyed participate with their family in charitable activities, and two in three (65%) say their family decides together which causes or non-profit organizations they support.

Moreover, sizable numbers (37%) say their family has supported the same set of causes for more than a generation. One in five (21%) say their family has gone so far as to establish a family foundation.

"The business owners we surveyed appear grounded in a circle of trust that influences their philanthropic decisions," says Dave Johnston, Senior Vice President, SunTrust Private Wealth Management. "Outside of satisfying their own aspirations to do right by the community-at-large, these business owners want validation from their family."

"Significant others," in the form of a spouse or partner, topped business owners' outside influencers at 81%. "Gut" feelings (76%) and "friends/colleagues" (73%) are also cited by at least three in four business owners in making charitable decisions.

To a lesser extent, business owners cited simply a "family member" (67%) or a "business partner or associate" (67%) as influencers. Rounding out the list of other factors were "my church, synagogue or mosque" (60%), employees (52%), philanthropic literature (40%), information from non-profit watchdogs (36%) and major media (28%).

"Many of our business-owner clients are looking to put their personal passions and family finances to work through establishing foundations," explained Johnston. "The days of one-time donations have given way to an age of corporate social responsibility, marked by a more strategic, consistent and targeted approach to overall giving."
Many of those surveyed (36%) have incorporated philanthropic giving into their financial plan. Among them, a number have written non-profit organizations into their will (53%), set up planned giving (45%) and established a private or family foundation (44%).

Among those who have incorporated planned giving into their financial plans, those who have started a business "from scratch" are more likely than those who did not to have established a family foundation or private foundation (57 percent versus 33 percent).

A common trait of philanthropic icons throughout modern history such as Warren Buffett, Bill Gates, Irene Diamond, John D. Rockefeller and Andrew Carnegie has been a desire to put great fortunes to maximum use for major, vital causes. Business owners surveyed were consistent in wanting to support tried-and-true charities and unyielding in wanting these non-profits to exhibit fiscal discipline.

"Business owners are accustomed to looking at the bottom line in any investment decision, and philanthropic giving is no different. We see more business owners incorporating charitable giving into their formal financial planning as a way to ensure a lasting legacy," explained Johnston. "In doing so, they want to know about an organization's track record and how successful the organization has been in achieving its goals. In addition to heeding emotional cues, business owners need the reassurance of a sixth sense: ROI."

More than half of those surveyed agree they support organizations that are well established (65%) and/or that they have researched thoroughly (62%).

About three in ten like to have hands-on control: 36 percent say they give money only to organizations they are personally involved with, and 30 percent do not give money unless they have control over how it is spent.  Owners who started their own business from scratch also reported that they want personal oversight over money they donate: 39 percent agree that they are less likely to donate to charities if they "don't have control over how the money is spent" (versus 23% of owners who did not start their own business).

SunTrust Bank Private Wealth Management commissioned a survey by GfK Roper Public Affairs to better understand the philanthropic habits of high net worth business owners. The Bank's Commercial and Private Wealth Management lines of business have formed a strategic partnership, through the Business Owner Specialty Group, to address the unique business and personal financial complexities faced by this elite group.

Virtually all the business owners who took part in the survey have made a charitable donation personally (96%) and/or through their business (79%).  On average, in 2007 they report having donated over a quarter of a million dollars to charitable causes through their businesses and $78,000 personally or as families.

An online survey was conducted to reach this elite group.  In total, 202 business owners whose companies have at least $10 million in revenue were surveyed.  All interviews were self-administered using GfK's proprietary web-based platform.  Respondents were randomly drawn from GfK's online panel. The survey was conducted in March, 2008.


Source: SunTrust Banks, Inc.

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Posted by Mark Rodrigues at 8/26/2008 10:06 AM
Categories: wealth marketing
 

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