Philanthropy’s Missing Middle  Characteristics of MidLevel Donors (part 1)
23 Jul 2020

Philanthropy’s Missing Middle Characteristics of MidLevel Donors (part 1)

The “missing middle” is a term used in a variety of contexts that can also be applied to philanthropy. While most research looks at the philanthropic behavior of high and ultra-high net worth donors, who represent 8.5% of US households, and may occasionally focus on small donors who give under $1,000 annually, very little attention is paid to “midlevel” donors who earn between $100,000 and $200,000 a year. This demographic represents 22% of US households but falls just below the minimum earnings level to qualify for the SEC’s definition of “high net worth.”

Members of this group are noticeably more generous than small donors and care deeply about the effectiveness of their donations but cannot access the bespoke services of philanthropy advisory departments in private banks nor afford consultants. Their beliefs, needs and philanthropic habits are well worth investigating and monitoring.

To this end, and in collaboration with Dr. Cal Halvorsen of Boston College’s School of Social Work, I recently commissioned a study of 1,260 individuals who made charitable donations ranging from $2,000 to $20,000 in 2019. Each week, I will post a discussion of the results from one portion of this survey.

40% of survey respondents earned under $100,000 annually and 16% earned over $200,000 annually. So, almost half (44%) fell within the midlevel demographic. In my sample of midlevel donors,  32% gave between $2,000 and $5,000 in 2019, 29% gave between $5,000 and $10,000, 25% gave between $10,000 and $15,000, and 13% gave between $15,000 and $20,000.

Every midlevel donor gave well above the national average of 1.9% of income.  When compared with donors at other income levels, it was apparent that a “jump” in giving occurred once individuals earned more than $100,000. For example, only 12% of respondents earning under $100,000 a year gave more than $10,000 to charity, a figure often cited by fundraisers as a significant threshold. But 38% of the group earning between $100,000 and $200,000 reported giving over $10,000 in 2019 – a jump of 309%.

As income levels increased beyond $200,000, the curve leveled off. Only 48% of respondents in the high net worth income bracket reported making gifts over $10,000, a much smaller increase of 26% over the midlevel bracket. In fact, there was almost no difference the percentage of midlevel and high net worth donors who gave over $10,000. And 56% of high net worth respondents gave less than $10,000 a year (this survey did not include high net worth donors who gave more than $20,000).

Another noticeable change in giving behavior appeared at the $150,000 earnings mark. While only 9% of donors earning between $100,000 and $150,000 gave at the highest level proposed in the survey ($15,000 to $20,000), the number jumped to 20% once respondents reached annual incomes of $150,000. At this earning level, the most popular giving category shifted from “$2,000 to $5,000” to “$5,000 to $10,000” (chosen by a third). But high net worth respondents did not increase their favorite giving category beyond the $10,000 level until they reached annual incomes over $350,000.

These findings provide conclusive support for the proposition that midlevel donors are a much more important donor demographic than often perceived – yet woefully neglected by advisors and philanthropic resources.



Write a post