Charity Dropping! Generosity Rising?

Financial Justice Organizing philanthropy
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August 3, 2021

            New Orleans, There’s a fair amount of head-scratching about the way Americans are turning away from charitable organizations.  Since our founding, we’ve been touted from de Tocqueville on for our belief in such organizations, but surveys indicate that those days are fading.

The Lilly Family School of Philanthropy at Indiana University has been surveying families for some years.   In 2000, they found in a study of 9000 households that 66% donated to a charitable organization.  In 2018, when the last such comprehensive survey was taken, the percentage had plummeted to barely half, 49.6%.  Sorting out contributions to religiously affiliated organizations, donations to secular nonprofits reached a low of 42% in 2018.  On the other hand, the total cash value of donations is recording new record highs.

What’s up with all of this?

Haleluyu Hadero, writing for the Associated Press, notes that giving to “religious causes has decreased in tandem with attendance at worship services as the number of Americans not affiliated with any religion grows.”  She notes that “only about a third of households headed by someone under the age of 40” made donations, arguably because the Great Recession didn’t allow them to “establish the habit of giving.”  Not noted, but undoubtedly a factor would be the change in tax laws that removed some of the incentives for short-form filers with less income to give – or record – their contributions.

In a time of gross wealth inequity, none of this should be a surprise.  The super-rich are giving truckloads of cash to big universities, hospitals, and charities.  Why should the little guy be putting his few bucks there?  Furthermore, most charities don’t spend their time and effort trying to get her a hundred bucks here and there.

Other research has found in recent years that there is also a huge divide between what I would call generosity, especially as a percentage of income, and donations.  These studies have found that the lower the income, the more generous people are, but they aren’t talking about donations to 501c3 charitable nonprofits.  They are looking at the constant exchange of groceries, small loans, babysitting, rides, and survival mechanisms for families within a community.  No tax deductions or IRS letters are triggering this level of philanthropy.

When we are talking about percentages of wealth that are given, the ultra-wealthy making the Giving Pledge are dancing around.  They are committing to donating half of their wealth, either in their lifetimes or in their wills.  I’m not saying that’s nothing.  It’s big money, but, face it, even giving away half, they will still be hugely wealthy.  Giving away half when they die is as much tax and estate planning as it is generosity, and, hey, they enjoyed every penny, while they were alive, so here’s one hand clapping.

In these crazy inequitable times, there is a lot more money out there that could be given, especially with the stock market still running at record highs.  Why would regular families give their precious money – and time – to charities that are spending most of their time currying to the rich?  The generosity gap, like the wealth gap, is huge, and it’s worth keeping in mind before there is too much hand wringing about Americans being less charitable.  It may be that more charity is at home and less to institutions, and until institutions do a better job of building mass support rather than high-value donor contributions, my bet is that the percentage of givers will continue to fall.