The current state of philanthropy in America.
January 1, 1998
in this forum:
Are Americans now more concerned with humanitarian and social philanthropy than ever before? Does America's generosity derive from some national benevolence or is it representative of a failure by our government to provide a social safety net for the underprivileged? With respect to Mr. Soros' and Mr. Turner's philanthropic undertakings, do you believe that there is a danger with such large scale donations? With all the attention given to Soros and Turner, it seems to me that the "little man", the average American, has been grossly overlooked. Has not the average American also been giving more? What do you believe can explain the recent upturn in philanthropic donations? New wealth? New spirituality? Sohan Wickramasinghe of New York, NY, asks:
With all the attention given to Soros and Turner, it seems to me that the "little man", the average American, has been grossly overlooked. Has not the average American also been giving more?
Kathleen D. McCarthy, Director of the Center for the Study of Philanthropy, responds:You're absolutely right. Statistically, people in the lowest income brackets tend to donate as much, if not more [in terms of percentages] of their household income as people with much higher salaries, until you reach the very highest brackets where tax deductions provide significant incentives. Much of this giving is donated through religious institutions, often in the form of weekly donations. Every year, approximately 45-50% of all the money donated by foundations, corporations and individuals goes to religious institutions, and much of this money comes from donors of moderate means.
The data also suggest that low-imcome donors have become increasingly generous. According to statistics compiled by the Independent Sector, in 1993, Americans with annual incomes below $10,000 donated 2.7% of their household incomes and those in the $10,000 to $20,000 range gave 2.3%. Conversely, those in the $75,000 to $99,000 bracket gave only 2% of their household income. By 1995, donors in the lowest income bracket had upped the level of their contributions to 4.3%, and those in the $10-20 thousand dollar range were giving 2.8%, as opposed to their wealthier counterparts whose giving dipped to 1.8% of household income.
The Independent Sector responds:
Although large donations given by people like Soros and Turner have been receiving a great deal of media attention, philanthropy for the most part takes place on a much smaller scale. The majority of contributions come from individuals. Americans today give as individuals to local hospitals, colleges, arts organizations, places of worship, and many other causes. In 1996 individuals donated a total of $120 billion of the total $150 billion given to nonprofits. Thus, 87 cents of the charitable dollar came from individuals, and most of this from individuals of modest means. Nearly 70% of all American households give.
The average household contributes about 2% of their annual income to charitable causes. The average gift, according to Independent Sector research, is about $1,017, which is a 16% increase over the average household contribution ($880) in 1993. This increase in giving can be explained by the fact that the average household income increased by 11% in current dollars, an increase of 5% after inflation.