'MIDDLE RICH' DONATE LOWER PERCENTAGE OF WEALTH THAN OTHER GROUPS
A new study by San Francisco-based NewTithing Group has concluded that charitable giving in the United States would have increased by an additional $41 billion in 2001 if individuals in the upper middle class and 'middle rich' had given as much as other income classes.
The study defines the 'upper middle class' as those income tax filers with adjusted gross income (AGI) ranging from $200,000 to $1 million, and average investment assets of $1.7 million to $4.46 million. The 'middle rich' class is defined as filers with AGI of $1 million to $10 million, and average investment assets of $8.5 million to $46 million.
By measuring charitable donations as a proportion of investment assets, the study found that individuals in the 'upper middle class' and 'middle rich' groups gave approximately half of 1 percent of their wealth to charity. In contrast, individuals in lower income groups (less than $200,000 annual income and $83,000 - $490,000 in investments) gave approximately 1 percent of their wealth to charity.
Although the 'upper middle class' and 'middle rich' owned in aggregate nearly twice as much in estimated investment assets, their less affluent counterparts donated a total of 21 percent more to charity--$3.26 billion more.
Those individuals in the 'super rich' category--filers with adjusted gross income of at least $10 million and average investment assets of $152 million--gave, on average, more than 1 percent of their wealth to charity.
In addition, the study found that by selling appreciated assets for taxable gains while donating cash to charity, the 'middle rich' and 'super-rich' paid more than half a billion dollars in avoidable capital gains taxes. Through more tax-advantageous giving strategies, they could have kept or donated to charity an additional $659 million.
For a complete copy of the report, "The Generosity of the Rich and Poor," click on NewTithing Group.