Fact of the Week: Those with Less Give More


October 8, 2014

While millions of Americans struggled through the Great Recession and in the years that followed, the need seen by charities was higher than ever. Many charities experienced a decline in donations during these years. However, those who struggled the most found a way to dig even deeper into their pockets and increase their charitable giving during these tough times. A new report from the Chronicle of Philanthropy found that lower- and middle- income Americans – those defined in their study as making $100,000 or less – increased the percentage of their income they donated to charity by 4.5 percent between 2006 and 2012. Those with the lowest incomes – $25,000 or less – increased their giving the most, up a whopping 16.6% from 2006 to 2012.
What about the richest Americans? Did the plight of so many millions of Americans inspire them to give a larger share of their change in share of income spent on charitable donationsincome to help their neighbors in need? Not so much. In fact, they gave less – about 4.5 percent less in 2012 than in 2006. As the graph at the right shows, as incomes increased, the percent of income given to charity consistently decreased.

To be fair, while those earning $200,000 or more donated a smaller share of their income during this time frame, the actual amount donated increased by $4.6 billion from 2006 to 2012, reaching $77.5 billion, after adjusting for inflation. Forbes notes that, in that period, the collective wealth of Americans of the Forbes 400 soared by $1.04 trillion. Those who earned less than $100,000 gave $57.3 billion in 2012. On average, the percentage of their income that Americans donate to charity is about 3 percent, a figure that’s remained roughly the same for decades.

What makes these findings even more interesting is the fact that middle- and lower-income Americans earned less, on average, in 2012 than they did in 2006. If fact, a piece in the Washington Post tells us that the middle class is poorer today than they were in 1989: “Real incomes haven’t increased at all since 1999….Median net worth is actually lower, adjusting for inflation, than it was in 1989. Even worse, it’s kept falling during the recovery.” So even though they had less, folks in these groups gave a larger share of their income in the toughest of times.

Why is it that those with less give more, at least when talking about percentages? Perhaps it’s because the middle and lower classes relate more to those in need. An article in the October 9 Chronicle of Philanthropy discussing the report says that nonprofits that serve the poorest have said the loyalty of people with low and moderate incomes kept them going in the darkest times of the recession. This article quotes a chief development officer at a homeless shelter in LA, who said, “It hits closer to home. Any day, they too could become homeless.” A related article notes that in at least one affluent area, residents don’t see that poverty is still an issue in their community because of the town’s prosperous appearance, and therefore don’t give to social services organizations as much.

To be sure, there are also other factors that play into charitable giving, including religious affiliation (Utah is the most generous state because of the high giving levels of the state’s many Mormans, and the report notes that religious affiliation is typically a primary driver of giving in the Bible-Belt states, where residents give regularly to their houses of worship), cultural or regional differences (four of the five most generous cities were in the Sun Belt), local support or ties to the communities and to the nonprofits, and more. But it is interesting to note that those with less to give are giving more of what they have because, at least in part, because they feel more connected to those in need. Those of us who advocate for our neighbors in need – and for policies that keep people out of poverty – know how important it is to include them in the process as advocates, to share their stories and help craft the solutions. For me, this report was one more reminder of that.

charitable giving
Fact of the Week
Poverty and Income
Social Services