The Poor Give More

Visiting Scholar Arthur C. Brooks
Visiting Scholar Arthur C. Brooks
Charitable giving is an American tradition. Surveys consistently find that between 65 and 85 percent of U.S. families make charitable donations each year, and we give away more than twice as much per capita as the citizens of even the most generous European nations. According to the Center on Philanthropy Panel Study, the average American family that gave to charity in 2002 donated $1,917. And contrary to what some might assume, this giving does not all--or even mostly--support houses of worship. The Giving U.S.A. Foundation reports that only about a third of individual gifts go toward religious causes; the rest are earmarked for secular concerns like education and health.

As impressive as these numbers are, there are still about 30 million American families that do not give charitably. Why not? According to Independent Sector's 2001 Giving and Volunteering in the United States survey of 4,000 households, common excuses include not being asked and fear that contributions will be used inefficiently by nonprofits. But the most common explanation for the lack of giving is a perceived deficiency of means: Two-thirds of nondonors say that they simply cannot afford to give. This sounds reasonable. There are plenty of Americans having trouble making ends meet, so why give away what little money they have? Thus we can logically assume that most of the Americans who don't give are poor, right?

Charitable giving is more than just a source of money to fund nonprofit activities; it is an expression of how communities band together to meet common goals.

Wrong. In fact, Americans at the bottom of the income-distribution pyramid are the country's biggest givers per capita. The 2000 Social Capital Community Benchmark Survey shows that households with incomes below $20,000 gave a higher percentage of their earnings to charity than did any other income group: 4.6 percent, on average. As income increased, the percentage given away declined: Households earning between $50,000 and $100,000 donated 2.5 percent or less. Only at high income levels did the percentage begin to rise again: For households with incomes over $100,000, the number was 3.1 percent.

Evidence of this pattern is not unique to the S.C.C.B.S. Economists have found this U-shaped giving curve in study after study of charitable donations. So the question is not whether this is true, but why it is true. One typical explanation is that the working poor tend to belong to religious congregations that are relatively literal about biblical imperatives to give. The S.C.C.B.S. shows that in 2000, poor American families were roughly twice as likely as their middle-class counterparts to be Seventh-Day Adventists, Pentecostals, or Jehovah's Witnesses.

Saying that the working poor sacrifice the biggest part of their income is not the same as saying that they give away the most money, of course. The S.C.C.B.S. indicates that the wealthiest 10 percent of households are responsible for at least a quarter of all money contributed to charity, including a fifth of what is funneled to religious organizations and about a third of what goes to secular causes. Philanthropy scholars consistently find that households with total wealth exceeding $1 million (about 7 percent of the U.S. population) account for about half of all charitable donations. Simply put, your local United Way would probably close down were it not for the rich people in your community. But the fact that the working poor sacrifice the highest percentage of their income is also important. Charitable giving is more than just a source of money to fund nonprofit activities; it is an expression of how communities band together to meet common goals.

If the poor are doing so much giving, who are the folks who claimed in Independent Sector's 2001 survey that they can't afford to? Ironically, this is a typical upper-income excuse. Among the people with above-average incomes who did not give charitably in the year 2000, a majority of survey respondents said they didn't have enough money. And they probably believe it. We live in a country in which three out of five families carry balances on their credit cards from month to month and the average household debt for consumer items is about $18,000.

Do all the poor give generously, or do some give more than others? The answer is that there is a fundamental difference between the working and nonworking poor. The working poor--families with the same income level as welfare recipients but who receive all their money from employment--are the big givers. The Center on Philanthropy survey data reveal this vividly. For example, consider two families: One earns its income from wages; the other relies on government support. Both families are near the bottom of the bottom in income, bringing in less than $14,000 in 2001. On average, the working family tends to donate more than three times as much to charity each year as the welfare family does.

When given the opportunity to work for a living, the poor are at least as generous as the rest of society. The bottom line about the relationship between philanthropy and income is that it's surprisingly counterintuitive. Don't assume that the poor cannot afford to give--they can and do. In fact, we can all learn a lesson from our fellow citizens of modest means.

Arthur C. Brooks is a visiting scholar at AEI.

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