Do Charitable Causes Drive Investment Decisions?
NEW YORK (MainStreet) For the wealthiest among us, investment decisions can be based on many things, but charity does not seem to be an important factor. In a Spectrem study of 1,000 investors, less than one-third (31%) said that support of a charitable cause influences their decision to invest in a particular company. Men are even less benevolent when considering a charitable cause as a factor when investing, with just 24% saying it is a consideration. For households with $5 million in investable assets, only 22% say it is a factor.
However, younger investors have a greater world view. Nearly half (48%) of investors under the age of 40 weigh charitable efforts in their investment decisions, and almost 40% (39.5%) of business owners do.
While being aware of a company's involvement in a charitable cause may tip the scales when making a buying decision for some investors, very few (7%) of the respondents say they invest primarily based on their support of a charitable cause. For the wealthiest investors -- those with $5 million or more in assets -- only 3% say it is a primary factor in an investment decision.
But charity is in the heart of 10% of women investors and a primary consideration of 16% of investors under the age of 40. Only a handful of seniors over 60 (5%) have charity as a top priority in their investment decisions.
For most investors it seems charitable donations aren't spurred by events, as well. In response to a disaster, charitable groups such as the Red Cross will often seek donations that can be made by phone, but only 8.5% of wealthy investors say they respond to such campaigns. Of investors under the age of 40, 16% report they will make such telephone contributions, while 13% of corporate executives report doing so. The least likely to respond to such campaigns and make a contribution by phone are the extremely wealthy. Only 4.5% of investors with a net worth of over 5 million said they would make a phone donation for disaster relief.
--Written by Hal M. Bundrick for MainStreet