Over the weekend, I listened to a “Marketplace” radio report about charitable giving. I was disappointed by the flimsy data offered in “When it comes to charity, the poor give more.” But it was the commentary of “conclusions” that had me missing turns.
In the opening of the story, the interviewee referred to a “Chronicle of Philanthropy” study of 2008 tax returns (the most recent year for which such data is available) that reported lower income households give a higher percentage (7.6%) of their discretionary income to charity than upper income households (4.2%).
Duh, it’s simple math – when you divide by larger numbers (larger denominator), the answer is smaller.
Since I was driving, I wanted to know specific numbers. From the interactive map:
$50-100K households donated an average of $2,047; 6.0% of discretionary income
$100-200K household donated an average of $3,361; 4.2% of discretionary income
$200K + households donated an average of $14,088; 4.2% of discretionary income
My first question was “what’s discretionary income?” since tax returns list Adjusted Gross Income (AGI). The report admits that it subtracted median housing costs and average living expenses by zip code from each AGI. That omits so many other expenses, especially child care, medical and college costs, that aren’t really discretionary. The donations of filers who take the standard deduction aren’t included either. There’s also the influence of tax policy, religion and even politics: “red states are more generous than blue states.” After reading the report, I conclude that there’s more to making a donation than one’s income. But the guest presenting the report never mentioned any of this.
Instead, the guest used this report to paint upper income earners as callous and hard-hearted. He said they were “less compassionate,” “less responsive” to suffering, and accused those who make large philanthropic gifts, such as sponsoring a building, as doing so to gain status and recognition.
Piff adds, “[Wealth] gets you to be a little more disengaged from other people, a little more focused on yourself and as a result it creates this kind of buffer between yourself and other people.”
Year after year, I’ve observed stunning generosity while volunteering for IOCP’s Adopt-a-Family holiday gift program. Given the geographic service area of IOCP (Wayzata, Orono, Plymouth), it’s a fair guess that many of the sponsors would fall into the upper income bracket. I am offended that this so-called expert would paint any of those wonderful people as “less compassionate” because of one statistic.
It seems this report was offered not to provide a snapshot of giving, but an attempt to paint upper income earners as a bunch of Scrooges that need to have their wealth wrestled from them. This story plays into the current fiscal curb meme that the rich should ‘pay their fair share.’ Boo to MPR and Marketplace for passing off an opinion as research.