My total charitable contributions for 2006 amounted to $0. My 2007 contribution is a $25 donation to my school. Granted, I am still in college. But I have the ability to give more, especially because all my basic living costs are covered and I could forgo a meal of $20 sushi in exchange for writing a check to a charity. For some reason (conscious or unconscious), I have chosen not to donate as much as I could.
I thought about this topic when I stumbled on this post by Miserly Bastard. Although MB doesn’t reveal his exact finances, I’d venture to say that he is one of the wealthiest pf bloggers around. Given that he is an attorney and that his wife works at a hedge fund/private equity shop in NYC, their household income probably hits the seven figures. MB reveals that he only made a $125 cash donations to charity in 2006.
Why give? I decided to read on what charitable-to-charities bloggers have to say about the issue.
1. Free Money Finance regularly writes on tithing and donates his blog’s revenue to charities. According to FMF, giving will help you get out of debt. FMF says his experience “in coaching people in their finances for 15 years or so. It seems like the givers are always better off, able to get back on track easier, etc.”
2. English Major aims to donate 5% of her income to charitable organizations. She wants to make sure that her financial decisions reflects her principles.
3. Millionaire Artist continues to donate even though her income has been reduced. She writes giving forces her to appreciate what she does have.
4. TiredButHappy’s giving plan details an annual donation of $1,500, to the political organizations that she supports.
How does this relate to MB and his contributions? Hopefully I have not misunderstood the above four posters (my apologies if I do), but it seems to me that their charity comes from the fact that they derive utility in giving. In other words, people who contribute to charity derives more gratification and happiness by giving money away. For example, I contributed $25 to my school because donating that $25 makes me happier than if that money was sitting in the bank or if I bought a new wallet with it. (I hope readers don’t think I am trivializing people who give by saying that they derive utility from giving.)
According to MB, he never found charitable giving to be particularly psychically gratifying, although he is not averse to giving. Now, what incentives would there be for MB to give? Even though he doesn’t seem to be much of a giver, MB obviously has been successful at managing his finances – he is VERY well-off by almost any standards. He is a husband and a father who care about his family’s welfare (just look at this post on emergency preparation!). Like English Major, MB’s giving DOES reflect his principles (but their principles differ) – he donated to Hurricane Katrina because of patriotism, and did not donate to the Asian tsunami crisis because he decided that he owed no moral duty to help non-Americans.
Like TiredButHappy, MB contributes cash to political organizations that he supports. In his case, he gives to the NRA every year, but that donation is not tax deductible. Still, one could argue it is no less a charitable giving than a donation to the Sierra Club.
So, why would people who derive no utility from giving still give? If giving DOESN’T make you feel better, if you feel NO sense of obligation to people outside your family or community, if you are financially successful and appreciative of what you have WITHOUT giving, if you don’t have a religious reason for being charitable, why would you give? How would someone convince you to give? SHOULD you give?
This is a difficult subject.
Basically, I give because I think everyone who can is obligated to give. I think there’s a moral duty there. I give because I believe that actions speak louder than words–that we can ultimately be evaluated as people by our behavior. It’s all well and good to say I support [Cause X], but if I don’t actually provide support in any helpful way, what good am I to this cause I say is important to me? Pretty much none.
Yes, I could be off the hook for a few more years because I’m young and don’t make much money (so who’s going to look at me and sneer because I don’t donate money?), but what kind of habits does thinking of not giving as “getting off the hook” create in me?
Frankly, giving this 5% is kind of a pain. I mentioned before that I don’t make a ton of money–I could really use that extra $60 per pay period. I really could. I could use it to more than double my emergency-fund savings, or to be able to buy lunch at work every day instead of having to plan what I’m going to pack, to have delicious sandwiches and fresh fruit every day instead of leftover pasta. But I don’t.
And certainly, you can argue that the benefit that I get back from these sacrifices is the ability to feel good about myself, that I am just paying for something I want, which is a sense of my own contribution to the world, whereas what Miserly Bastard wants is a house in the Hamptons. But what are the actual, concrete results of our actions? My hope is that as my income increases, my 5% contribution will be enough to do some serious good. I think a house in the Hamptons does some good, too–it can bring happiness for MB, his wife, their kids, and the people whose lives they enrich with their presence in the Hamptons community. It can create jobs, too, and support other people’s families that way. But I also think it’s excessive, and that the imbalance evident when one family has a country home and another is being cut off at the knees by the abysmal quality of public education is insupportable, that it cries out for rectification. I believe it is incumbent upon all of us to contribute to raising the basic quality of life in the society that has facilitated (or that we hope will facilitate) our own success. MB’s attribution of his giving during Hurricane Katrina to patriotism should go further: I give patriotically every paycheck. I believe in realizing the promises of America for everyone under her aegis–I think of Roosevelt’s “Four Freedoms” speech here.
So much has been given to me. I was given a good education (my high school is a magnet school, and publicly funded, and pretty much every major college or university, even private ones, receive some federal funding). I was given museums to visit, and a safe city to travel through, and the means to travel it, and my father’s income was supported by the tourism industry, into which the city pours money. My society, my city and my country have given abundantly to me–and to nearly all successful people. I think it is my responsibility as a beneficiary of those gifts to pass them on.
I also think that this recent NYT Magazine piece on billionaire philanthropy can add to this discussion.
I’m sorry to be so long-winded. As you might have guessed, this is a topic close to my heart.
I personally think you can’t or shouldn’t ask someone to give. Giving has to come from that person’s heart.
Sometimes, it takes a life time for a(n) (unforunate) soul to realize the importance of being generous and giving.
Every time I see Oprah or Bill Gates give away cars and other prizes, I think they are doing it for the tax writeoff. I enjoy the tax writeoff when I give money too, but I give to the causes that I truly believe in. After Katrina, I gave to the Humane Society for the animal victims, and I always give to the MD-SPCA. My dog came from the SPCA and I support what they do. I also give to church, and I give money to my college in a form of a scholarship where my friends and I choose the criteria.
I agree with English major that if you are successful, you should give back to those that helped you succeed. Whether it’s 10 dollars a year or 10,000 dollars a year. You have got to give it back to help those behind you.
When I read that Oprah or Bill Gates are giving, I think that they are only doing it as a tax writeoff. I do enjoy the tax writeoff, but I give to causes I believe in. After Katrina, I gave to the Humane Society to help the animal victims, and I always give a lot to the Md-SPCA.
Oh, my friends and I made up a scholarship at our college, and we give that out every year on our terms. It’s a cool way to give back to the school and the students.
I think that if you’re successful you have to give to help those coming up behind you. Someone helped you get where you are, so you have to give back.
I became convinced once I realized just how effective a small donation can be. This New York Times magazine piece points out that donations on the scale needed to reduce world poverty by half – sustainably and permanently, by meeting the UN’s Millennium Development Goals – would be possible if only the richest 10% of Americans would give generously.
The article is rather philosophical at the beginning but gets more pratical around page 5, which is where it says that the top 0.01% of American taxpayers (earning more than $5 million annually) could/should give 30% away, leaving them with incomes of at least $3.3 million annually; those above $1.1 million (the top 0.1 percent) could/should give 25%; the top 0.5% (those earning $410K+) could/should give 20%; the top 1% could/should give 15%, and the top 10% (those earning $92,000+) could/should give 10%.
Now, most regular churchgoers already have a 10% tithing goal, so it is not unrealistic for people to reach that level. You can argue about suggesting 33% donation levels, but as the author points out, this would still leave the poorest of those taxpayers with incomes of at least $3.3 million. I’m not a socialist or a communist but personally I don’t think I could live with myself if I were keeping $3.3 million every year while people starve to death, children are pulled out of school, women die in childbirth for lack of simple medical care, and millions of people don’t have access to clean water.
well warren buffett didn’t give anything for years and years and then suddenly he just gave most of his wealth to charity!!
I didn’t make any charitable contributions last year either. I didn’t find a suitable charity I wanted to donate money.
But I’ve changed my mind this year – there are several organizations including NPR, my j-school (the professors have been really helpful with my job search and they really encouraged me to apply for programs/internships while I was in school that led to contacts I still use today) and the YMCA.
Even when Hurricane Katrina hit and everyone was urging to donate to the Red Cross, I didn’t. Most of the money to the Red Cross goes to admin costs and there’s so much bureaucracy. But after doing some volunteer work and listening to NPR, those are my favorite organizations especially the Y which really helps kids with the various programs they have.
Btw, your post was really well thought out! I don’t know how you write so well in depth. But great post!