Posts tagged ‘UBS’

October 8, 2019

It’s All Up to You Now

It’s that time of year once again. It’s the season when most charities raise the most amount of money, perhaps because that’s when most fundraising activity happens. However, how tough will it be to raise money as the end of 2019 approaches?

You might be concerned about a recession on the horizon. You should be. We’re experiencing a record for sustained economic growth that quite simply can’t go on forever. A recession is bound to hit eventually even without factoring in trade wars, political turmoil, disruptions to the global oil supply, and the threat of foreign wars.

Among ultra-wealthy Americans, those with an average worth of $1.2 billion, 55 percent believe the US will enter a recession within the next year, according to the UBS Global Family Office Report. About 45 percent of respondents are sufficiently concerned that they are boosting their cash reserves, and 45 percent are realigning their investment strategies to mitigate risk.

While recession fears loom, a major economic downturn has yet to take shape. In other words, the economic climate is currently good from a fundraiser’s perspective. Could it be better? Sure. Always. But, it’s plenty good enough for you to anticipate a successful year-end fundraising effort. Consider some of the following six economic factors (as of Oct 4, 2019):

Gross Domestic Product. GDP is growing at a rate of 2.0 percent. Overall philanthropy historically correlates closely with GDP. So, if GDP goes up, we can anticipate that philanthropic giving will also increase.

Unemployment. The national unemployment rate is 3.5 percent, the lowest since 1969. If more people are working, more people will likely have funds with which they can donate.

Wages. Wages have increased 2.9 percent over 2018. Individual giving closely correlates to personal income. So, if personal income is rising, we can anticipate a rise in individual philanthropy.

Stock Market. The stock market, while volatile, has been performing well. This year, the Dow is up 13.92 percent, the NASDAQ is up 20.30 percent, and the S&P is up 17.76 percent. This is good for fundraising for two important reasons worth mentioning here. First, stock growth means that foundations and donor-advised funds will have more money with which to donate. Second, many individuals own stocks that have appreciated in value. When donating appreciated stocks, individual donors can avoid capital gains tax. In other words, even if someone can’t claim a charitable gift deduction under the current tax code, they can still derive a tax benefit by contributing appreciated securities.

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July 26, 2013

Prospects Are Not Feeling Their “Wealth”

Seventy percent of people with investible assets of $1 million or more do NOT consider themselves “wealthy.”

That stunning news comes from The UBS Investor Watch for the third quarter of 2013. For the report, UBS surveyed 4,000 investors in the US.

The report also found that four out of five survey respondents are either supporting adult children or elderly parents to some degree.

The current edition of The UBS Investor Watch has significant implications for Poor Little Rich Girlnonprofit organizations and their fundraising programs, especially planned giving efforts.

This is particularly true if we take a moment to consider what other studies have revealed about perception of wealth and giving. Research projects have shown that many donors think that planned giving, even bequest commitments, are something that only wealthy people do.

For example, in one focus group study, The George Washington University learned that some alumni held the mistaken belief that bequests involve very large financial commitments from those who are very wealthy. As I describe in my book, Donor-Centered Planned Gift Marketing, three problems arise from this thinking:

First, prospects believe that bequest giving is simply not for them, but rather the wealthy—many who are truly wealthy do not perceive themselves as such and, instead, think of themselves as merely ‘comfortable.’ Second, while some prospects might be willing to give through a bequest, they might not actually do so because they feel their gift would be too insignificant to matter. Third, some prospects expressed embarrassment over the notion of giving a modest bequest gift while the perceived norm is much larger.”

As the UBS study shows, a great number of wealthy individuals do not consider themselves wealthy. As other studies have shown, many people think planned giving is something that only the wealthy do. This means that many people with significant assets will fail to make a planned gift believing it is not something for them.

So, how can nonprofits overcome this perception?

Charities do not need to convince people that they are truly wealthy when they do not think that to be the case. That would certainly be an awkward and unproductive conversation. Instead, nonprofit organizations must do a better job of educating prospects so that they understand that the organization needs and appreciates all planned gifts, assuming that’s the case.

As I share in my book:

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