Charity: Who Gives?

From Ken Stern:

It is not. One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income. In 2011, the wealthiest Americans—those with earnings in the top 20 percent—contributed on average 1.3 percent of their income to charity. By comparison, Americans at the base of the income pyramid—those in the bottom 20 percent—donated 3.2 percent of their income. The relative generosity of lower-income Americans is accentuated by the fact that, unlike middle-class and wealthy donors, most of them cannot take advantage of the charitable tax deduction, because they do not itemize deductions on their income-tax returns.

But why? Lower-income Americans are presumably no more intrinsically generous (or “prosocial,” as the sociologists say) than anyone else. However, some experts have speculated that the wealthy may be less generous—that the personal drive to accumulate wealth may be inconsistent with the idea of communal support. Last year, Paul Piff, a psychologist at UC Berkeley, published research that correlated wealth with an increase in unethical behavior: “While having money doesn’t necessarily make anybody anything,” Piff later told New York magazine, “the rich are way more likely to prioritize their own self-interests above the interests of other people.” They are, he continued, “more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.” Colorful statements aside, Piff’s research on the giving habits of different social classes—while not directly refuting the asshole theory—suggests that other, more complex factors are at work. In a series of controlled experiments, lower-income people and people who identified themselves as being on a relatively low social rung were consistently more generous with limited goods than upper-class participants were. Notably, though, when both groups were exposed to a sympathy-eliciting video on child poverty, the compassion of the wealthier group began to rise, and the groups’ willingness to help others became almost identical.

If Piff’s research suggests that exposure to need drives generous behavior, could it be that the isolation of wealthy Americans from those in need is a cause of their relative stinginess?

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  • JoeyS

    I direct a nonprofit so this sort of information is of great interest to me.

    Ruby Paynes research, it seems, would affirm Piff’s conclusions. Most of my clients are generous to their chagrin. What I mean by that is that they will make, what I consider, poor financial decisions in order to help a friend or family member. Payne suggests that people who live in poverty value people above things or money, because things and money are not as consistent or reliable to them. They regularly help others out even if by doing so it will set them up for failure down the road (i.e. missing a bill). Exposure to the plight of others is directly correlated with generosity.

    I like what Claiborne said in Irresistible Revolution. “I had come to see that the great tragedy of the church is not that rich Christians don’t care about the poor but that rich Christians don’t know the poor.”

  • I couldn’t help but think of what Jesus said of the poor widow who gave all she had to the treasury with regard to the amount given by the rich: “For all of them have contributed out of their abundance; but she out of her poverty has put in everything she had, all she had to live on” (cf. Mark 12:41-44 NRSV).

    Why would she do that? How would she eat? When would she get money again? The state of one’s heart seems to be the focus (cf Prov. 28:21-22).

  • More than 25 years ago my wife and I (white, middle-class, middle-income) chose to live in an urban center neighborhood where we are in constant contact with people who are low income and some who are in generational poverty. That has kept issues of poverty always in front of us. I realize everyone can’t the option we did but it strikes me that we need to be intentional about finding ways to connect with the poor in our community (and by that I don’t mean “doing” for them, or sending money, but sharing lives.) That will motivate and redirect more of our giving.

    It is interesting that people who attend church weekly, regardless of political persuasion or religion (Christian, Muslim, Jew, etc), give substantially more to the poor than those who aren’t as religious. Worship seems to focus us outward and creates community that leads to generosity.

  • Hydroxonium

    “One of the most surprising, and perhaps confounding, facts of charity in America is that the people who can least afford to give are the ones who donate the greatest percentage of their income.”

    Although its underlying premise may well be true, this is a really flawed interpretation of the statistical data. It assumes that people consciously donate a percentage of their income. It is far more likely that people simply think of their donations in terms of raw values. Then, it is hardly surprising that people with lower incomes donate a higher percentage of their income.

  • Robin

    This brings to mind the research by Arthur Brooks that showed increased levels of giving, especially to the poor, was strongly correlated with being conservative: socially and religiously.

    If Brooks’ work is valid, and I have never seen anyting to suggest otherwise, it isn’t difficult to realize that wealth, generally, is highly correlated with liberalism. The poorest states are the most conservative. And within each state the most affluent areas (cities) are also the most wealthy. You can just look at the county by county election map if you want to see pockets of blue among seas of red.

    I would also suggest, charitably, that this might imply liberals view the state, and its various arms, as the legitimate sphere for a social safety net. They might not give the private or religious charities because they support generous welfare programs through taxation.

  • Robin

    I am also not saying that all liberal are rich and stingy, just that in most (all?) states, the areas with the highest median income had the largest margins for the Democrats in the recent elections. I would suggest that the districts with median incomes in the top 20% likely went overwhelmingly for President Obama.

  • TJJ

    I like the *ss@ole theory, but I don’t think that explains it for most. I think it more likely comes down to discipline and knowledge about money. Those with $ get better professional advice about what to do with it, ie save it and invest it and don’t fritter it away impulsively, etc. Also, those who are just by nature more cautious with money and tend to save, not spend, with often have more and be more wealthy. Finances 101 is the principle what what you earn is only half the equation. What you keep is the other half. Those who have less money often spent more of what they do earn and live beyond or right at their means. Thus they have less no matter what they earn.

  • Aaron

    @Hydroxonium I tend to agree with you…

    Also, I think it would be beneficial to look at the overall taxes paid by the wealthy. Many of the “top 20%” described above typically pay between 40 and 45% in taxes on actual income (obviously not overall wealth). I think this discourages the wealthy from giving to non-profits. Besides, many of those taxes got to Social Security, welfare and other government programs that are in fact aiding the poor. Perhaps it is difficult to surmise true ‘generosity’ from the outside looking in when there is not a choice where nearly half the money goes.

    Last of all, if I were wealthy, it would be more advantageous to society, economics and the poor for me to invest my wealth back into my business. Instead of giving directly to the poor and ‘feed them for a day’ as the saying goes, it is much better to hire someone and ‘feed them for a lifetime’. I feel this is generosity as well.

    PS I’m in the ‘bottom’ 20%’ and I still think this way.

  • @Aaron, I’m a college student reading Maths and Economics, and I just felt that the statistical interpretation seemed quite unconvincing. I enjoyed reading your comment.

    Indeed, apart from donating to charity, there are many other (often better) ways to allocate one’s wealth for the good of the world (and it does appear that wealthier people are better poised to consider the alternatives).

    Education (the right kind) is something I’m really interested in, since I feel that the “great commission” is primarily a call to teach (disciple) the world. Jesus teaches us to heal the sick and feed the poor, and it’s much more than mere physical healing and food. There is also the spiritual aspect which requires us to teach the wisdom that comes from God, personified by Christ (1 Cor 1:30). Education seems to simultaneously address both physical and spiritual poverty.

    I’m also around the 20th percentile, but I’m not complaining (Jer 9:23-24) 🙂

  • Andrew

    Robin, I’m afraid your points don’t match with the data:

    1) First off, Brooks’s book is a completely partisan mess. It’s methodology is very poor-his generic labels are ridiculous (giving to the Heritage Foundation is classified as “charity” as much as giving to a soup kitchen; and of course people who go to church every Sunday are more apt to donate to their church, also classified as ‘charity’) Not only does he infer statistical significance from his data where there is none, but if you looked at giving to what could be objectively called ‘charity to the poor/less fortunate’ the partisan differences he cites would disappear. Generally, any research done in which the book title exclaims “how liberals . . ” or “how the right wing” from either side is generally garbage. My advice would be to stick to studies with boring titles done by Social Science nerds at a University. And trust me many of those nerds are conservative I went to school with them!

    2) Wealth correlated with liberalism? It’s a difference between urban and surburban/rural living, education and race . . you can’t just look at “rich and poor states” If you look at the poorest states ie Southeast U.S., liberalism increases with education, whether they live in a city and whether a person is a minority; meanwhile the white lower middle and working classes in rural and suburban communities are very conservative.

    3) Aaron,the rich are wealthier than ever AND pay a lower share of their income in taxes than they have in 50 years. A huge number pay far less than 40% due to the various deductions offered to them by the tax code. Have they gone on a hiring spree with all of that flush income? No, because jobs don’t grow from rich people getting more money; they grow from innovation and demand. A rich person getting a tax cut and then using that money to play in the stock market isn’t doing anything to help those below him/create jobs. If a rich person sees an opportunity to invest in a start-up that WOULD create jobs (and make him money) a difference of 5% on his tax bill won’t make a world of difference . . he will invest in the company regardless because it will be a net benefit. This is substantiated by loads of research. Their IS a “Laffer curve” but it doesn’t even start showing up until you are taxing close to 70% of income . . we can’t even agree on a system so that the very richest pay around 40%.

  • Thanks Andrew, you saved me a lot of time typing a similar response.

    I think there is a significant connection between proximity and giving. There is a reason Jesus modeled and commanded SOLIDARITY with the poor and not just almsgiving, something JoeyS alluded to with the quote from Shane Claiborne.

    The ‘woe is us’ attitude of many affluent, caucasians (especially politically conservative Christians in my neck of the woods) in this country troubles my soul greatly. Anyone else catch Bill O’Reilly’s comparison of the USA with Galilee under the Romans? In case you didn’t know, Jesus died over taxes: