Personal Finance

Charitable giving doesn't slow after retirement, study finds

Key Points
  • Charitable giving generally stays the same after retirement, while other spending goes down, according to a new study by the Women's Philanthropy Institute.
  • Other differences in how single men, single women and married couples give are also consistent after retirement.
  • “That dispels the myth that retired couples don’t have money or won’t give,” said Debra Mesch, director of women’s Philanthropy at the Lilly Family School of Philanthropy at Indiana University.

There is good news for any non-profit that relies on donations for financial support. A new study has found that retirement does not have a significantly negative impact on charitable giving.

The study, conducted at the Women’s Philanthropy Institute at Indiana University, found that if a pattern of gifting to charity has already been established before retirement, it is highly likely to continue after retirement, even as other financial changes occur.

“That dispels the myth that retired couples don’t have money or won’t give,” said Debra Mesch, director of women’s Philanthropy at the Lilly Family School of Philanthropy at Indiana University.

The report drew data from studies that tracked charitable giving over a number of years, starting in 2001. The sample surveyed included more than 6,000 single, married or cohabitating households where individuals were aged 55 to 101.

The Women’s Philanthropy Institute is a part of the Lilly Family School of Philanthropy at Indiana University. The goal of research and educational programming at the institute is to increase understanding of women’s philanthropy and broadly share the results to improve charitable giving.

Giving before, during and after retirement

To see the impact of retirement on spending and donating to charity, the study looked at households of single men, single women and married couples in the years before, during and after deciding to retire. It also compared the amount and frequency of charitable giving to spending and purchasing.

What the study found is that the likelihood of giving declines 4 percent in a span of five years before and after retirement, and that this amount is considerably less than the average decline in spending, which is 16 percent on average.

“That’s really positive news for fundraisers and for people that work in the non-profit sector,” said Mesch. And it shows that “planning is going on in household budgets for charitable giving.”

Women holding their own

The study also found that some key differences in giving stay true after retirement. One is that single women and married couples give higher amounts to charity than single men.

There are other differences in how men and women give highlighted in the study.

Single Women surveyed were more likely to spread out their spending and give even amounts each year to a variety of charities. Men, on the other hand, were more likely to give larger amounts sporadically.

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“Women are very equal and seem to give across a number of organization in a consistent pattern,” Mesch said. They “may be more strongly committed to giving throughout their entire lives and plan better for it," she added.

There are probably a couple of reasons for this, Mesch said, from women’s experience in working — they are more likely to move in and out of the labor market and plan accordingly — to social structures that teach women to be more egalitarian and altruistic.

For the future

Some of the gender differences found in the study of retirees hold true in other generations, Mesch said. Single millennial women today show strong giving, much in line with single boomer women’s giving in the 1970s.

“We don’t know what the millennial generation is going to look like when they are 60, 70 or 80,” Mesch said. But “we’d expect that pattern would continue,” she added.

In addition, technology has changed how younger generations engage with charitable giving. Direct giving through crowd funding and social media campaigns like Giving Tuesday have changed how people interact with charity and donate.

Charitable giving
Charitable giving

For non-profits, Mesch said, the study was overwhelmingly good news and gives them a lot to think about in terms of how they engage different groups. Do they target men, women and married couples differently? What about different age groups? How do they look at volunteering time versus donating money?

The study also shows that charitable giving should continue to be a part of retirement planning.

“It really opens the door for wealth advisors and planned giving consultants to help people plan how they’re going to maintain giving,” Mesch said.