6 ms·

Why the US is #1 in philanthropy and how it differs by country

36 points by dcaldwell 16y ago

callmeed 16y ago
This article sure doesn't answer the "why" question well. I'd love to see some deeper analysis, especially related to tax breaks, the number of available charities, and correlation between giving & religion.
- dcaldwell 16y ago
  Houses of worship and religiously affiliated organizations pull the largest % of donations in the US according to studies. Given the much higher presence of churches and church attendance in the US as opposed to Europe, I could see that driving per capita donations in the US up. However, unless it's only the Christian population that gives more per capita, I'm not sure why other highly religious countries wouldn't also rank high. The article does address tax breaks in some countries. In regards to the number of charities in the US, not counting houses of worship, we have around 1 for every 300 persons. Not sure what that level is in other countries but would love to find out.
  - btmorex 16y ago
    Religious charity also doesn't really explain it. Even if you removed 100% of the U.S. charitable giving to religious organizations, they would still easily rank #1. My guess is that it's mostly cultural. For example, a lot of large employers will even match employee contributions up to a certain level every year to the charity of the employees choice.
rbranson 16y ago
One thing that's never mentioned in these types of articles is that the top two categories for donations are churches and schools. Fully one third of US donations are to churches and another 13% for educational institutions (including private colleges and K-12 schools). That's nearly half of donations going to organizations that perform very little actual philanthropy and spend most of their money with organizational self-interest in mind.
- dcaldwell 16y ago
  I would argue that even if one didn't see the value in religious organizations, schools do provide a benefit or actual philanthropy. Most of those who pay for private school both pay taxes to help cover the overall costs of public education and also pay tuition (and make donations) to their privates schools. In essence, the private education is providing quality education without removing resources from public schools. From the standpoint of churches, I agree that many of them perform little outreach to their communities. However, many of them do provide valuable philanthropic services such as soup kitchens, clothes closets, donated space for AA meetings, etc.
- Groxx 16y ago
  Doesn't that make the donation philanthropic, with the express goal of the receiver using it to further their self-interest? That's still philanthropy. Heck, what donation-receiver doesn't do this? Middle-men like the Red Cross count for both giver and receiver, so they're partially exempt - they give money / services they receive to those who intend to use it to further their best interest.
  - rbranson 16y ago
    The people who donate to the Red Cross are very unlikely to receive back in any tangible form. The average American church is more like a club which collects money from it's members to maintain the clubhouse and provide weekly entertainment. The more hip, "relevant" churches require even more money because they have more contemporary furnishings and design, agency-style marketing campaigns, sophisticated audio/video equipment, larger spaces for ancillary services such as child care and small group meetings, bring in out-of-town acts, and keep a large staff to support these operations. This is especially effective because it positions the church as more of a brand and lifestyle provider rather than just a "thing that we do on Sundays." People who spend 5-10 hours a week involved in church activities become psychologically dependent and are going to be astronomically more likely to donate, and donate in larger amounts. This is clearly in the best interest of the church as it increases donations, and I have no problem with them undertaking these activities, but I think they operate far outside of the original spirit of what tax-exempt status was purposed for. As a side note, and a little anecdote, my girlfriend works at a liquor store and has several regular customers that use their tax-exempt status as church staff to purchase wine and liquor that is clearly for themselves. Of course, there's almost no way to create an efficient audit trail for this type of stuff, so they get away with it.
fmw 16y ago
The article touches upon cultural differences in how publicly flaunting wealth by openly giving large sums to charity is perceived. In Europe, from my perspective as someone living in the Netherlands, we find it hard to imagine to attend a flashy fundraiser dinner to finance good causes or even politicians seeking election. The only thing that comes close are auctions for charity, but these are generally frowned upon in traditional circles as vehicles for celebrities and the noveau riche in their attempt to appear in the society columns of the less respectable newspapers. We love participating in state sanctioned lotteries for charity (the only kind allowed here in the Netherlands) and collectively open our wallets whenever a natural disaster strikes (e.g. the tsunami of '04 or more recently the floods in Pakistan or the disaster in Haiti). Our reaction to events like that is to broadcast tremendously successful fundraiser shows on the public TV channels (like NPR in the US) that feature celebrities appealing to the public to give money. I suppose these natural disasters remind us of our own battle with the elements, like the flood of 1953. The problem with that kind of aid, of course, is that it isn't very effective, because it's hard to put all that money to good use in areas where all the infrastructure is gone while dealing with corrupt governments that can't be relied upon. That being said, we do try to imitate the US. Things like fundraiser dinners are starting to happen on a small scale. There is no self respecting (pseudo) celebrity that doesn't work on a side project as the 'ambassador' of some kind of animal shelter or what not. A cynic would say that these activities are great publicity for people that want to stay in the spotlight. Of course, there are also a few people doing productive charity work, e.g. on education or micro lending, so it wouldn't do to be overly dismissive. A major difference between European welfare states and the US is taxation. Our (upper) middle class pays a 52% income tax and that is just the first in a long list of fiscal burdens. This raises different expectations from the government, because unlike the US we actually give them the money to pursue the dreams of ambitious politicians so they don't have to overspend the budget. As I'm of the persuasion that private initiatives are infinitely more promising than anything the government comes up with I envy the American culture where the wealthy don't look to the government to support the causes they care about. Of course, the downside of the American culture is that the way politics gets financed (with the Obama campaign as a positive exception) seems a bit sketchy at times. Not that our own system is preferable, because we've taken it to the other extreme and have our government pay for the election campaigns of our politicians in order to avoid the suggestion of political debt to private benefactors. My main worry about charitable giving in the US are the incredibly well financed religious groups that force their creationist fantasies upon helpless school children or hold back things like stem cell research. The right answer to that, however, isn't to change the American culture of giving, but to make sure that voices of reason can match the deep coffers of religious pressure groups.
d99kris 16y ago
I think it would be more fair to rank based on per capita or percentage of GNI. Maybe I'm just Swedish.
- deleted 16y ago
  [deleted]
- xiaoma 16y ago
  The third and fourth sentences from the article: "Charitable giving in the U.S. as a proportion of gross domestic product, for example, is around 1.7%. In Europe, it is around 0.7% and in Japan it is just 0.04%, according to U.S. wealth manager Northern Trust." GDP is a very similar statistic to GNI, but also includes income from other countries such as interest and dividends. Per capita rankings would make both Japan and Europe as a whole look even worse, since the the US has a higher per-capita GPD. For Sweden, which has a comparable GDP per person, it would come out about the same.
known 16y ago
Swedish are the best. Without tax breaks their ODA is 0.98%
- gjm11 16y ago
  The ODA figure is the amount the government spends, not what individuals give. (The US's ODA figure is rather low. Perhaps that has an impact, one way or another, on the giving of individuals in the US.)
ilitirit 16y ago
I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That's unacceptable. http://www.spiegel.de/international/germany/0,1518,710972,00.html http://www.spiegel.de/international/germany/0,1518,710972,00...
- viggity 16y ago
  There are four ways to spend money 1. You can spend your money on yourself 2. You can spend your money on someone else 3. You can spend someone else's money on yourself 4. You can spend someone else's money on yet another person As you go down the list, people get more and more careless with how that money is spent. Yet you suggest that #4 is superior to #2 (bureaucrat spending money on a third party, instead of the rich spending their own money on a third party). And that make zero sense.
  - ilitirit 16y ago
    I didn't "suggest" anything...
barry-cotter 16y ago
Because it has the largest economy in the world, perhaps?

36 points by dcaldwell 16y ago

This article sure doesn't answer the "why" question well. I'd love to see some deeper analysis, especially related to tax breaks, the number of available charities, and correlation between giving & religion.

dcaldwell 16y ago
Houses of worship and religiously affiliated organizations pull the largest % of donations in the US according to studies. Given the much higher presence of churches and church attendance in the US as opposed to Europe, I could see that driving per capita donations in the US up. However, unless it's only the Christian population that gives more per capita, I'm not sure why other highly religious countries wouldn't also rank high. The article does address tax breaks in some countries. In regards to the number of charities in the US, not counting houses of worship, we have around 1 for every 300 persons. Not sure what that level is in other countries but would love to find out.
- btmorex 16y ago
  Religious charity also doesn't really explain it. Even if you removed 100% of the U.S. charitable giving to religious organizations, they would still easily rank #1. My guess is that it's mostly cultural. For example, a lot of large employers will even match employee contributions up to a certain level every year to the charity of the employees choice.

rbranson 16y ago

One thing that's never mentioned in these types of articles is that the top two categories for donations are churches and schools. Fully one third of US donations are to churches and another 13% for educational institutions (including private colleges and K-12 schools). That's nearly half of donations going to organizations that perform very little actual philanthropy and spend most of their money with organizational self-interest in mind.

dcaldwell 16y ago
I would argue that even if one didn't see the value in religious organizations, schools do provide a benefit or actual philanthropy. Most of those who pay for private school both pay taxes to help cover the overall costs of public education and also pay tuition (and make donations) to their privates schools. In essence, the private education is providing quality education without removing resources from public schools. From the standpoint of churches, I agree that many of them perform little outreach to their communities. However, many of them do provide valuable philanthropic services such as soup kitchens, clothes closets, donated space for AA meetings, etc.
Groxx 16y ago
Doesn't that make the donation philanthropic, with the express goal of the receiver using it to further their self-interest? That's still philanthropy. Heck, what donation-receiver doesn't do this? Middle-men like the Red Cross count for both giver and receiver, so they're partially exempt - they give money / services they receive to those who intend to use it to further their best interest.
- rbranson 16y ago
  The people who donate to the Red Cross are very unlikely to receive back in any tangible form. The average American church is more like a club which collects money from it's members to maintain the clubhouse and provide weekly entertainment. The more hip, "relevant" churches require even more money because they have more contemporary furnishings and design, agency-style marketing campaigns, sophisticated audio/video equipment, larger spaces for ancillary services such as child care and small group meetings, bring in out-of-town acts, and keep a large staff to support these operations. This is especially effective because it positions the church as more of a brand and lifestyle provider rather than just a "thing that we do on Sundays." People who spend 5-10 hours a week involved in church activities become psychologically dependent and are going to be astronomically more likely to donate, and donate in larger amounts. This is clearly in the best interest of the church as it increases donations, and I have no problem with them undertaking these activities, but I think they operate far outside of the original spirit of what tax-exempt status was purposed for. As a side note, and a little anecdote, my girlfriend works at a liquor store and has several regular customers that use their tax-exempt status as church staff to purchase wine and liquor that is clearly for themselves. Of course, there's almost no way to create an efficient audit trail for this type of stuff, so they get away with it.

fmw 16y ago

The article touches upon cultural differences in how publicly flaunting wealth by openly giving large sums to charity is perceived. In Europe, from my perspective as someone living in the Netherlands, we find it hard to imagine to attend a flashy fundraiser dinner to finance good causes or even politicians seeking election. The only thing that comes close are auctions for charity, but these are generally frowned upon in traditional circles as vehicles for celebrities and the noveau riche in their attempt to appear in the society columns of the less respectable newspapers. We love participating in state sanctioned lotteries for charity (the only kind allowed here in the Netherlands) and collectively open our wallets whenever a natural disaster strikes (e.g. the tsunami of '04 or more recently the floods in Pakistan or the disaster in Haiti). Our reaction to events like that is to broadcast tremendously successful fundraiser shows on the public TV channels (like NPR in the US) that feature celebrities appealing to the public to give money. I suppose these natural disasters remind us of our own battle with the elements, like the flood of 1953. The problem with that kind of aid, of course, is that it isn't very effective, because it's hard to put all that money to good use in areas where all the infrastructure is gone while dealing with corrupt governments that can't be relied upon. That being said, we do try to imitate the US. Things like fundraiser dinners are starting to happen on a small scale. There is no self respecting (pseudo) celebrity that doesn't work on a side project as the 'ambassador' of some kind of animal shelter or what not. A cynic would say that these activities are great publicity for people that want to stay in the spotlight. Of course, there are also a few people doing productive charity work, e.g. on education or micro lending, so it wouldn't do to be overly dismissive. A major difference between European welfare states and the US is taxation. Our (upper) middle class pays a 52% income tax and that is just the first in a long list of fiscal burdens. This raises different expectations from the government, because unlike the US we actually give them the money to pursue the dreams of ambitious politicians so they don't have to overspend the budget. As I'm of the persuasion that private initiatives are infinitely more promising than anything the government comes up with I envy the American culture where the wealthy don't look to the government to support the causes they care about. Of course, the downside of the American culture is that the way politics gets financed (with the Obama campaign as a positive exception) seems a bit sketchy at times. Not that our own system is preferable, because we've taken it to the other extreme and have our government pay for the election campaigns of our politicians in order to avoid the suggestion of political debt to private benefactors. My main worry about charitable giving in the US are the incredibly well financed religious groups that force their creationist fantasies upon helpless school children or hold back things like stem cell research. The right answer to that, however, isn't to change the American culture of giving, but to make sure that voices of reason can match the deep coffers of religious pressure groups.

d99kris 16y ago

I think it would be more fair to rank based on per capita or percentage of GNI. Maybe I'm just Swedish.

deleted 16y ago
[deleted]
xiaoma 16y ago
The third and fourth sentences from the article: "Charitable giving in the U.S. as a proportion of gross domestic product, for example, is around 1.7%. In Europe, it is around 0.7% and in Japan it is just 0.04%, according to U.S. wealth manager Northern Trust." GDP is a very similar statistic to GNI, but also includes income from other countries such as interest and dividends. Per capita rankings would make both Japan and Europe as a whole look even worse, since the the US has a higher per-capita GPD. For Sweden, which has a comparable GDP per person, it would come out about the same.

known 16y ago

Swedish are the best. Without tax breaks their ODA is 0.98%

gjm11 16y ago
The ODA figure is the amount the government spends, not what individuals give. (The US's ODA figure is rather low. Perhaps that has an impact, one way or another, on the giving of individuals in the US.)

ilitirit 16y ago

I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That's unacceptable. http://www.spiegel.de/international/germany/0,1518,710972,00.html http://www.spiegel.de/international/germany/0,1518,710972,00...

viggity 16y ago
There are four ways to spend money 1. You can spend your money on yourself 2. You can spend your money on someone else 3. You can spend someone else's money on yourself 4. You can spend someone else's money on yet another person As you go down the list, people get more and more careless with how that money is spent. Yet you suggest that #4 is superior to #2 (bureaucrat spending money on a third party, instead of the rich spending their own money on a third party). And that make zero sense.
- ilitirit 16y ago
  I didn't "suggest" anything...

barry-cotter 16y ago

Because it has the largest economy in the world, perhaps?