{"id":20588,"date":"2020-05-11T23:27:32","date_gmt":"2020-05-11T23:27:32","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=20588"},"modified":"2020-05-15T14:22:03","modified_gmt":"2020-05-15T14:22:03","slug":"rich-folks-arent-that-stingy-after-all","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/rich-folks-arent-that-stingy-after-all\/","title":{"rendered":"Rich folks aren&#8217;t that stingy after all"},"content":{"rendered":"<p><a href=\"https:\/\/theconversation.com\/profiles\/benjamin-a-priday-1046919\">Benjamin A. Priday<\/a>, <em><a href=\"https:\/\/theconversation.com\/institutions\/texas-aandm-university-1672\">Texas A&amp;M University <\/a><\/em><\/p>\n<p>At least half of American families have been giving money to charity every year \u2013 but that fraction <a href=\"https:\/\/theconversation.com\/fewer-americans-are-giving-money-to-charity-but-total-donations-are-at-record-levels-anyway-98291\">had been declining<\/a> prior to the global pandemic.<\/p>\n<p>We\u2019re living in a very different world now. <a href=\"https:\/\/www.politico.com\/news\/2020\/04\/23\/coronavirus-unemployment-claims-numbers-203455\">Millions are unemployed<\/a>, the <a href=\"https:\/\/hbr.org\/2020\/04\/nonprofit-fundraising-in-the-age-of-coronavirus\">needs of nonprofits are ballooning<\/a> and there are <a href=\"http:\/\/abcnewsradioonline.com\/music-news\/2020\/4\/30\/rob-chris-jason-gavin-are-ready-to-rock-the-house-for-animal.html\">constant appeals for donations<\/a> on <a href=\"https:\/\/www.marketwatch.com\/story\/giving-tuesday-now-asks-americans-to-lend-a-hand-during-the-coronavirus-pandemic-you-can-help-even-if-youre-cash-strapped-2020-05-04\">social media<\/a> and <a href=\"http:\/\/abcnewsradioonline.com\/music-news\/2020\/4\/30\/rob-chris-jason-gavin-are-ready-to-rock-the-house-for-animal.html\">television<\/a>.<\/p>\n<p>It\u2019s still unclear how charitable giving will change. But one thing is the same: Massive donations by the rich and famous are making the same big splash they always do.<\/p>\n<p><iframe loading=\"lazy\" id=\"nr02m\" class=\"tc-infographic-datawrapper\" style=\"border: none;\" src=\"https:\/\/datawrapper.dwcdn.net\/nr02m\/1\/\" width=\"100%\" height=\"400px\" frameborder=\"0\"><\/iframe><\/p>\n<p>Take, for example, the recent group of billionaires <a href=\"https:\/\/www.businessinsider.com\/billionaires-spending-hundreds-of-millions-on-coronavirus-research-2020-3\">who are donating to pandemic relief<\/a>. The growing list of these high-profile givers includes established philanthropists like Microsoft co-founder <a href=\"https:\/\/www.vox.com\/future-perfect\/2020\/4\/14\/21215592\/bill-gates-coronavirus-vaccines-treatments-billionaires\">Bill Gates, who runs a big foundation along with his wife Melinda Gates<\/a>, and Alibaba founder <a href=\"https:\/\/theconversation.com\/chinas-big-donors-are-pitching-in-to-deal-with-the-new-coronavirus-and-not-just-in-their-own-country-134777\">Jack Ma<\/a>. It also includes people like <a href=\"https:\/\/twitter.com\/jack\/status\/1247616214769086465\">Jack Dorsey<\/a> \u2013 the internet entrepreneur who co-founded Twitter and founded Square, a mobile payments company, and is currently CEO of both companies.<\/p>\n<div data-react-class=\"Tweet\" data-react-props=\"{&quot;tweetId&quot;:&quot;1247616214769086465&quot;}\"><\/div>\n<p>Yet many people believe that the <a href=\"https:\/\/www.scientificamerican.com\/article\/how-wealth-reduces-compassion\/\">rich are inherently less generous<\/a> \u2013 or that <a href=\"https:\/\/www.businessinsider.com\/billionaire-donations-causes-philanthropy-arts-education-2019-6\">they donate only to museums and art galleries<\/a>, preferably at <a href=\"https:\/\/theconversation.com\/let-them-eat-caviar-when-charity-galas-waste-money-82961\">fancy galas<\/a>.<\/p>\n<p>This notion of the <a href=\"https:\/\/www.weforum.org\/agenda\/2016\/10\/wealth-can-make-us-selfish-and-stingy-two-psychologists-explain-why\/\">selfish rich<\/a> conjures up images of <a href=\"https:\/\/www.youtube.com\/watch?v=NBRrCY5uhWY\">Scrooge McDuck swimming in his room of gold<\/a>.<\/p>\n<p>But are the rich really stingier than the rest of us?<\/p>\n<p>I\u2019m an economist who <a href=\"https:\/\/scholar.google.com\/citations?user=jWArVX0AAAAJ&amp;hl=en&amp;oi=ao\">studies charitable giving<\/a>. To find out, I teamed up with <a href=\"https:\/\/scholar.google.com\/citations?user=-3aAjZgAAAAJ&amp;hl=en&amp;oi=ao\">Jonathan Meer<\/a>, a leading scholar of these issues.<\/p>\n<h2>What gives?<\/h2>\n<p>Reliable data on charitable giving is hard to come by.<\/p>\n<p>Much of it comes from tax returns for people deducting their charitable donations from their reported income, but <a href=\"https:\/\/www.nber.org\/papers\/w26452\">the vast majority of Americans<\/a> don\u2019t itemize their tax returns and can\u2019t take advantage of that tax break. This is especially true for low-income people, but the number of itemizing, middle-class taxpayers is also <a href=\"https:\/\/www.taxpolicycenter.org\/taxvox\/21-million-taxpayers-will-stop-taking-charitable-deduction-under-tcja\">decreasing sharply<\/a> since the enactment of the sweeping tax reforms passed in 2017.<\/p>\n<figure class=\"align-right zoomable\"><a href=\"https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip\"><img src=\"https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip\" sizes=\"(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px\" srcset=\"https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=600&amp;h=903&amp;fit=crop&amp;dpr=1 600w, https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=600&amp;h=903&amp;fit=crop&amp;dpr=2 1200w, https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=600&amp;h=903&amp;fit=crop&amp;dpr=3 1800w, https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;h=1134&amp;fit=crop&amp;dpr=1 754w, https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=30&amp;auto=format&amp;w=754&amp;h=1134&amp;fit=crop&amp;dpr=2 1508w, https:\/\/images.theconversation.com\/files\/332824\/original\/file-20200505-83736-1nnvnbe.jpg?ixlib=rb-1.1.0&amp;q=15&amp;auto=format&amp;w=754&amp;h=1134&amp;fit=crop&amp;dpr=3 2262w\" alt=\"\" \/><\/a><figcaption><span class=\"caption\">Scrooge McDuck may be more generous than you think.<\/span><br \/>\n<span class=\"attribution\"><a class=\"source\" href=\"https:\/\/www.gettyimages.com\/detail\/news-photo\/dagobert-duck-disneyland-park-disneyland-resort-paris-paris-news-photo\/181271306\">Peter Bischoff \/ Getty Images<\/a><\/span><\/figcaption><\/figure>\n<p>There\u2019s also an <a href=\"https:\/\/www.nber.org\/papers\/w27076\">outlier problem<\/a> \u2013 some people who don\u2019t earn much money actually are rich. Despite having ample stocks and retirement savings and actually having plenty of money to give away, they are technically low-income for tax purposes. This complication makes the average giving for truly poor Americans look much bigger than it really is.<\/p>\n<p>We addressed these problems and more using income, wealth and charitable giving data from the University of Michigan\u2019s <a href=\"https:\/\/psidonline.isr.umich.edu\/\">Panel Study of Income Dynamics<\/a> and the Lilly Family School of Philanthropy\u2019s <a href=\"https:\/\/philanthropy.iupui.edu\/research\/current-research\/philanthropy-panel-study.html\">Philanthropy Panel Study<\/a>. This comprehensive data encompasses how everyone gives, not just people who itemize on their tax returns.<\/p>\n<p>That means we aren\u2019t talking about the Jack Dorseys and Bill Gateses of the world \u2013 or even garden-variety millionaires. <a href=\"https:\/\/www.philanthropyroundtable.org\/almanac\/statistics\/who-gives\">Ultra-wealthy donors are significant<\/a>, of course, but that wasn\u2019t our focus.<\/p>\n<h2>The generosity of rich folks<\/h2>\n<p>We first tried to see if people with more money were more generous. There are <a href=\"https:\/\/theconversation.com\/why-money-is-an-impoverished-metric-of-generosity-64783\">many ways to define generosity<\/a>, so we pick three outcomes to analyze: the likelihood of donating, the amount given and the proportion of income going to charity.<\/p>\n<p>Unsurprisingly, people earning higher incomes and with more wealth give more money away. Maybe a bit more surprising is that the likelihood of donating anything at all increases with income and wealth. For example, someone making US$400,000 per year is 27 percentage points more likely to donate to charity that year than someone making $17,000, even after controlling for factors like age, race, religion and employment.<\/p>\n<p>The most <a href=\"https:\/\/www.nytimes.com\/2010\/08\/22\/magazine\/22FOB-wwln-t.html\">popularly cited measure<\/a> of generosity is the proportion of a family\u2019s income that is donated. This is where the rich appear to be the most stingy. But this notion turns out to be incorrect: After limiting the distorting effect of the outliers, the share of income people give away is essentially flat across income levels.<\/p>\n<p>Families give between about 1.4% and 2% of their income on average.<\/p>\n<p><iframe loading=\"lazy\" id=\"Ft2xU\" class=\"tc-infographic-datawrapper\" style=\"border: none;\" src=\"https:\/\/datawrapper.dwcdn.net\/Ft2xU\/4\/\" width=\"100%\" height=\"400px\" frameborder=\"0\"><\/iframe><\/p>\n<p>We also looked into how much of their income families who earn a lot of money give away \u2013 something that this original pool of data doesn\u2019t cover. Using the 2016 Internal Revenue Service <a href=\"https:\/\/www.irs.gov\/statistics\/soi-tax-stats-individual-income-tax-returns-publication-1304-complete-report\">Statistics of Income tables<\/a>, we found people making $2 million a year or more tend to give an even larger share of their incomes away.<\/p>\n<p>For example, a family making $600,000 a year donates an average of about 2.3% of their income to charity. Families making $4 million give an average of 3.4% away. These numbers reinforce our findings that the super rich aren\u2019t less charitable than everyone else.<\/p>\n<p><iframe loading=\"lazy\" id=\"kYwHs\" class=\"tc-infographic-datawrapper\" style=\"border: none;\" src=\"https:\/\/datawrapper.dwcdn.net\/kYwHs\/2\/\" width=\"100%\" height=\"400px\" frameborder=\"0\"><\/iframe><\/p>\n<p>Taken together, this is quite different than what <a href=\"https:\/\/journals.sagepub.com\/doi\/pdf\/10.1177\/0899764006295993?casa_token=JKMapBmJN4EAAAAA:0PJduTvw11_Hehfiv08C0_Pf4j8ZT68aqJokBptI05dGIHdL1JITZglSUcphUsKEdyeeFdfb6M8s\">other economists<\/a> have found before \u2013 findings that have generated <a href=\"https:\/\/www.theatlantic.com\/magazine\/archive\/2013\/04\/why-the-rich-dont-give\/309254\/\">a lot of media coverage<\/a>.<\/p>\n<p>To be sure, <a href=\"https:\/\/www.vox.com\/policy-and-politics\/2019\/1\/24\/18196275\/elizabeth-warren-wealth-tax\">people also care about<\/a> the share of wealth \u2013 as opposed to the share of income \u2013 donated. But it\u2019s hard to analyze: Wealth is largely held by a smaller number of people and is <a href=\"https:\/\/www.taxpolicycenter.org\/taxvox\/can-wealth-tax-raise-revenue-its-sponsors-hope\">notoriously difficult to value<\/a> or get data on for the super-rich.<\/p>\n<p>And of course, very wealthy people can and at least sometimes do set up charities and donations to ultimately <a href=\"https:\/\/theconversation.com\/us\/topics\/trump-foundation-31249\">benefit themselves<\/a>, which would not be generous. <a href=\"https:\/\/www.si.com\/nfl\/2017\/04\/23\/tom-brady-best-buddies-funding-charity-trust\">Stories about this behavior<\/a> surely exist. But because they are difficult, if not impossible, to show with the data available, I don\u2019t believe it makes sense to make generalizations about those concerns.<\/p>\n<h2>Clearing things up<\/h2>\n<p>Another commonly held belief is that even when the rich do give money, they give it to their <a href=\"https:\/\/www.salon.com\/2013\/12\/14\/the_wealthy_give_to_charity_elite_schools_and_operas_partner\/\">kid\u2019s private school<\/a>, a <a href=\"https:\/\/www.theartnewspaper.com\/news\/the-getty-the-world-s-richest-museum-hunts-for-wealthy-patrons\">museum or an art gallery<\/a>, or their <a href=\"https:\/\/www.vox.com\/future-perfect\/2018\/11\/19\/18102994\/michael-bloomberg-johns-hopkins-financial-aid-donation\">alma mater<\/a>. Poor people, conventional wisdom suggests, give to houses of worship, especially churches, and basic-needs charities like shelters and food banks.<\/p>\n<p>This belief, we determined, also turns out to be flawed.<\/p>\n<p>People with incomes in the bottom 25% give about half of all their donations to churches, synagogues, mosques and the like, compared to affluent Americans, who give 35%-45%.<\/p>\n<p>Low-income Americans, that is, make giving for religious purposes a higher priority than those who earn big incomes. And those high-income families do give proportionally more to the arts and education than everyone else.<\/p>\n<p>However, even the families from the main pool of data we studied who had the highest incomes give almost three times more to houses of worship than to arts and education nonprofits. That means that if a household earning $300,000 donated $5,000, on average about $1,600 of that might support a church, and just $575 would go to something like a nonprofit art gallery or their kid\u2019s private school, with the rest going to other types of charities.<\/p>\n<p><iframe loading=\"lazy\" id=\"TThP3\" class=\"tc-infographic-datawrapper\" style=\"border: none;\" src=\"https:\/\/datawrapper.dwcdn.net\/TThP3\/3\/\" width=\"100%\" height=\"400px\" frameborder=\"0\"><\/iframe><\/p>\n<p>At least in terms of the share of their income that they give away, we have found that the rich are at least as generous as the poor.<\/p>\n<p>[<em>You\u2019re smart and curious about the world. So are The Conversation\u2019s authors and editors.<\/em> <a href=\"https:\/\/theconversation.com\/us\/newsletters?utm_source=TCUS&amp;utm_medium=inline-link&amp;utm_campaign=newsletter-text&amp;utm_content=youresmart\">You can read us daily by subscribing to our newsletter<\/a>.]<!-- Below is The Conversation's page counter tag. Please DO NOT REMOVE. --><img loading=\"lazy\" style=\"border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;\" src=\"https:\/\/counter.theconversation.com\/content\/137211\/count.gif?distributor=republish-lightbox-basic\" alt=\"The Conversation\" width=\"1\" height=\"1\" \/><!-- End of code. If you don't see any code above, please get new code from the Advanced tab after you click the republish button. The page counter does not collect any personal data. More info: https:\/\/theconversation.com\/republishing-guidelines --><\/p>\n<p><a href=\"https:\/\/theconversation.com\/profiles\/benjamin-a-priday-1046919\">Benjamin A. Priday<\/a>, Doctoral candidate of Economics, <em><a href=\"https:\/\/theconversation.com\/institutions\/texas-aandm-university-1672\">Texas A&amp;M University <\/a><\/em><\/p>\n<p>This article is republished from <a href=\"https:\/\/theconversation.com\">The Conversation<\/a> under a Creative Commons license. Read the <a href=\"https:\/\/theconversation.com\/rich-folks-arent-that-stingy-after-all-137211\">original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Benjamin A. Priday, Texas A&amp;M University At least half of American families have been giving money to charity every year \u2013 but that fraction had been declining prior to the global pandemic. We\u2019re living in a very different world now. Millions are unemployed, the needs of nonprofits are ballooning and there are constant appeals for [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":20589,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5,277],"tags":[865,2181,7290,3050],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/20588"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=20588"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/20588\/revisions"}],"predecessor-version":[{"id":20629,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/20588\/revisions\/20629"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/20589"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=20588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=20588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=20588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}