The Rich Less Generous Than Others?
(Jan. 23, 2006) New research suggests that the rich in the United States are nearly half as generous as everyone else.
According to The Demographics of Charitable Giving produced by the San Francisco-based NewTithing Group, charitable giving would have increased by $25 billion in 2003 if affluent young and middle-aged individuals had donated as high a proportion of their investment asset wealth to charity as did their less affluent peers.
Only seniors (age 65 and older) tend to maintain an even level of generosity regardless of wealth, compared to their younger counterparts. In all other age groups, generosity falls, typically by more than half, the more wealth one accumulates.
For instance, for individuals ages 36 to 50, giving levels drop from 1.52 percent of investment asset wealth among the middle class and below, to 0.74 percent among upper middle class and middle rich filers. In contrast, for individuals aged 65 and older, giving levels remained relatively stable, from 0.67 percent among the middle class to 0.80 percent among upper middle class and middle rich filers.
The NewTithing Group works to encourage charitable giving, especially among the wealthy. Two of the group's (and the study's) main contentions are that the wealthy can afford to give more, and that the most appropriate way to measure charitable giving is to analyze giving levels against asset wealth, not annual income. The group argues that since the upper middle class and the affluent have investment assets that generally exceed their income, measuring donations as a percentage of investment assets is a better gauge of generosity.
The study examined unpublished data from the Internal Revenue Service from 2003 and compared giving levels based on age, annual income and investment earnings. It reveals a wealth of data about giving patterns, including:
- Super rich filers aged 35 and younger gave only 0.40 percent of their investment assets to charity in 2003, not only somewhat less than the generosity of their upper middle class and middle rich peers, but also 30 percent less generous than their peers in the middle class and below.
- Across most income categories, the average single female earns a far lower salary, yet holds far more investment assets. Although in most categories females donate a higher proportion of their salary to charity, there are no discernable differences in generosity between the sexes when gifts by average filer are measured as a proportion of investment assets.
- Among the super rich (more than $10 million in adjusted gross income) there is a correlation between donations and dependents. The 3,353 wealthiest filers with no dependents donated 4.74 percent of their investment assets. The 692 wealthiest filers with one dependent donated 0.56 percent. The 1,079 wealthiest filers with two dependents donated 0.86 percent. The 1,002 wealthiest filers with three or more dependents donated 1.05 percent.
According to the report, 130.4 million taxpayers contributed more than $148 billion to charity in 2003.
A copy of the report on the study is available on the Newtithing Group's website.