It was almost exactly 39 years ago. I was working as a chaplain at Brown at the time. The front page of The New York Times showed a picture of a very prominent business leader handing a $1M check to a charity. In those days, that was big enough money to warrant attention. One of the sons of this businessman was a sophomore at Brown at the time and people spent that day commenting on the picture to him. His response: “My father always told me that no one gives till it hurts.” This young person was well aware of the massive resources that family held – that $1M hardly made a dent.
This story came back to me as I have begun to get inquiries about my reaction to the recent study of regional and local giving patterns. Specifically the inquiries, and a good deal of space in the twitter-sphere, have all focused on the apparent surprise that those who gave the highest percentage of their income to charity do not come from the wealthiest areas. When one of my colleagues, a well-known and thoughtful commentator on his own, asked me to write about it, how could I refuse? So here are a few random reactions:
1. It may be true that no very rich person gives til it hurts, but most of us except the very wealthy do view our giving as a choice with implications. Most people have limited disposable monies, and the choice of supporting a charity or going to the theatre or taking certain vacations is in fact a trade-off. While the magic dollar number of when it crosses over into a real decision is a moving target, most middle and even upper middle class people do have such a number in their heads and budget. And generosity to a cause or organization or church may indeed limit other choices. Does it hurt? Not typically, but it does have lifestyle implications.
Not so for the hyper-wealthy. For those in the “giving pledge” level, 50% of their net worth will not likely impact what movie they see or what seat they get on their private jet. For that group, they really can give huge amounts – and it doesn’t hurt. But those huge amounts, for most, in any given year, may still be a small percentage of their net worth or even income.
Moreover, as we know, a great deal of income from this group is not earned income. Those who have less will give a greater percentage of their earned income since that is what they have. When there are many sources of resources, one may well give from pockets [such as private foundations, donor advised funds, restricted trusts, corporate matches, etc] which may well distort the overall picture. Thus one possibility is that those in the middle and upper income levels are giving generously from sources easier to identify than those of the richest.
2. Many people give weekly to their church or to United Way through payroll deductions. In effect, lots of people are giving what is technically charity but is emotionally like another regular tax. That is just what one does. And since it is likely that this regular giving adds up to a higher percentage for lower earners than the highest earners, the overall picture is one of greater generosity. If one were to get much deeper [admittedly a very very difficult thing to study], I suspect that the area of “choice” philanthropy other than these regular giving patterns would yield a somewhat different narrative.
3. It is also true that there are generational differences in giving patterns. Those in the wealthiest zip codes are probably older, more settled, and have established patterns. There is a higher percentage of voluntarism and giving among the millenials, but they are more transient and are earning less overall. So even when they are becoming wealthy, as some few do, they probably are not yet living in the highest net-worth regions. Their living and giving patterns may help skew these results we have seen.
4. People who are earning less, even if a good amount by any objective standards, may be more taken with the need for “compassion” giving. An earthquake, a flood, a drought, a fire, a tragedy, may yield more immediate charity than for the very wealthy who are more likely to have some sort of strategy/plan for their giving. The sense of “there but for the grace of God go I” is palpable for those not so many steps removed from crisis, and that emotional vulnerability may lead to increased giving. Those who are psychological and physically protected, may feel less need to give at such times – or if they do, do so at a more token level. [I am not sure if this is true, but it is worth exploration.]
5. There may be many other explanations – and I welcome the discourse – but one more occurs to me. The more one has, the more one thinks one needs. In my own advisory work, which deals exclusively with philanthropy, I must often deal with the challenges of wealth. “how much should I leave my children?” “For how many generations do I have responsibility?” “How public do I want my philanthropy to be and what are the implications for my family/business/social life?” Sometimes this leads to extraordinary philanthropy, but ofttimes just dealing with these questions is almost paralyzing. One without those kinds of means may not be sympathetic, but those with substantial wealth fully empathize with the challenges of wealth. It may be that in the wealthiest area codes we also see a great angst about all that money – and thus a lower giving rate. Maybe?
Richard Marker teaches and advises funders from around the world through both the NYU Academy for Grantmaking and Funder Education and the Wise Philanthropy Institute, both of which he founded. His blog can be found at Wise Philanthropy.