Who Gives?
Did you know that charitable giving increases at this time of year? Indeed, about 40 percent of all charitable donations in the U.S. are made in December. For many charities, end-of-year fundraising is the difference between a successful year and financial hard times. But who is doing the giving? Many think that the majority of all charitable donations are made by the ultra wealthy (think Bill Gates and Sam Walton), big foundations, or prosperous companies trying to increase their tax deductions. In reality, of the more than $300 billion that Americans give to charities every year, only 15% comes from foundation grants and 6% from corporations. The rest – nearly 80 cents of every dollar — is given by individuals. Yet, it’s not primarily by the people you’d most expect.
Who does give to charity? If you think that social class would be a straightforward predictor of charitable generosity, think again. Yes, it does stand to reason that the more wealthy a person is, the more they have to give and the less risky it is to give away some of that wealth. By the same token, the poorer a person is, the less they have to give and the more precarious it is to give some of that away. Therefore, logic dictates that the mega rich should be giving far more to charities than those nearest to the poverty line. Likewise, one would think that people living in the most affluent and liberal states would be more likely to give to charity than those in conservative and poorer states. However, the reality about charitable giving – in the U.S. and abroad – would probably surprise most people. It’s not what you’d expect.
A Profile of Givers
According to Philathropy.com, there are over 1.1 million charitable organizations in the U.S. and over $300 billion donated to those organizations each year. Nearly 94% of all Americans give some money to at least one charity each year. Yet, until recently, information about charitable givers was spotty and not validated. Then, in 2010, Hope Consulting conducted one of the most comprehensive surveys examining charitable donor habits in the U.S. The survey provided a better understanding of who gives, examining such factors as geography, religion, gender and other variables related to charitable giving. Survey results confirmed what other narrower studies done regarding charitable giving had shown.
#1. Those who have the least proportionately give the most to charity.
There seems to be an inverse relationship between generosity and wealth. For many, the richer they become the less (proportionately) that they give to others. In just about every study and survey, individuals in the lowest income levels did more volunteer work and gave proportionately more of their income than did wealthier individuals. Obviously, the poor did not give more in total dollars than the rich. After all, wealthy philanthropists do give away millions of dollars. In fact, The Chronicle of Philanthropy reports that of the top 25 charitable donations made in 2014 – ranging from $100 Million to $650 Million each — only three were made by foundations and three were anonymous. The rest were made by very wealthy individuals, couples or families.
That said, the poor and middle-class give proportionately more of their income and time to charity than do those who are much richer. Households that earned less than $75,000 gave an average of 7.6% of their discretionary income to charity, compared with an average of 4.2% for people who made $100,000 or more. Those earning over $200,000 per year donated 2.7% of their income to charity while the very wealthiest Americans contributed on average 1.3% of their income to charity. What is perhaps most striking about this disparity in generosity is that unlike middle-class and wealthy donors, lower-income American do not itemize deductions on their tax returns and therefore get absolutely no residual benefit from their charitable giving.
Some have wondered if somehow people got more miserly as they got wealthier? Or was the unwillingness to give to others precisely the reason why the rich got rich in the first place? According to the research, neither seems to be the case. Actually, scientists believe that the reason that wealthier people give less to charity is because wealth creates the opportunity for a greater degree of independence and separation from others. This causes affluent people to feel distant and disconnected from the struggles of those less fortunate. For example, a person of modest income might ride a bus, eat a packed lunch in the company lunchroom, live in a crowded apartment building, take kids to community pool and participate in neighborhood pot luck dinners. In all these situations, that person is sure to interact on a personal level with all kinds of people in all types of situations. On the other hand, an affluent person is likely to own a car, perhaps even have a driver, lunch with other affluent business associates, live in a large home with a big yard, and participate in recreational activities at a country club. A rich person is far less likely to interact with people of different economic levels and with greater needs. It is that separation that results in indifference and reduces generosity and charitable giving.
#2. Religious people give the most to charity.
By far, religious people are those most consistently associated with generous giving. Charitable effort correlates with the frequency with which a person attends religious services. The more devout the person, the more likely they are to give generously to charities. In fact, the faithful don’t just give to religious causes. They are also much more likely to give to secular causes than non-religious people. Among Americans who self-report that they “never” attend religious services, less than half give any money at all to either religious or secular causes. On the other hand, two-thirds of all people who attend religious services 27-52 times per year or more give money to secular charities.
#3. Women give more to charity than men.
Even though women earn on average .78 to every dollar a man earns doing the same job, and women overall are paid less than men, women generally give to charities more than men.
#4. Rural and conservative areas give more to charity.
Measured by how much they share out of what they have available, the most generous Americans are generally people living in areas that are more rural and conservative. According to the Washington Post, a report analyzing tax returns filed by tax-payers who itemize their deductions including charitable gifts shows the giving rate for the most generous states:
- Utah: 6.6 percent
- Mississippi: 5.0 percent
- Alabama: 4.8 percent
- Tennessee: 4.5 percent
- Georgia: 4.2 percent
- South Carolina: 4.1 percent
- Idaho: 4.0 percent
- Oklahoma: 3.9 percent
- Arkansas: 3.9 percent
- North Carolina: 3.6 percent
Note: This might also reflect places that have a higher percentage of religious people.
Why people give to charity varies. Some people are altruistic and want to make a difference. Others are concerned with inequality and justice. Others point to the concept of “paying it forward” or repaying a debt to society. Still others want to contribute to the greater good. Many give for religious or social reasons. Whatever the reason or variables that lead people to give, the goal is the same: to help another person, and that is a good thing any time of the year.
Quote of the Week
“No one has ever become poor by giving.” Anne Frank, Diary of Anne Frank
© 2014, Keren Peters-Atkinson. All rights reserved.
