Doing Good: Why do the poor give more than the rich?

This entry is part 4 of 5 in the series Doing Good

Money falling into a pileNOTE FROM DR. WAYNE BAKER: Have you told a friend about Gayle Campbell’s fascinating series about the ways Americans are “doing good”—or, rather, the ways we think we’re doing good? It’s easy to share these columns with the social media icons on this page. Here is her fourth of five parts …

Yesterday, we learned that Americans generally donate around 2% of their discretionary income to charity. The number is a far cry from the 10% often encouraged by charities and religious organizations.

We could point to plenty of reasons for the discrepancy—tight finances and a tough economy would likely top the list. But that doesn’t seem to stop low-income households in the U.S. from giving.

Did you know that low-income households tend to donate a much larger share of their discretionary income than the wealthy?

In 2011, Americans in the top 20% income bracket contributed 1.3 percent of their income to charity, while Americans in the bottom 20% donated 3.2 percent of their income. The Atlantic Magazine calls this “one of the most surprising, and perhaps confounding, facts of charity in America.”

What gives?

Some experts have speculated that the wealthy are simply less generous, and as wealth increases, compassion, altruism and ethical behavior decrease. What’s more—a study at The Chronicle of Philanthropy found that wealthy individuals who live in affluent areas are less likely to give than those who live in more socioeconomically diverse areas.

Simply put: When the rich don’t see the poor, their inclination to give decreases.

Research by social psychologist Paul Piff, over the last several years, generally supports this argument. Want to hear from Piff? Here’s a 16-minute TED talk by Piff titled “Does Money Make You Mean?”

The percentage of income donated isn’t the only major difference in how the rich and poor are giving. The wealthy tend to direct their donations not to the needs of the poor, but to other causes including cultural institutions or universities (often alma maters.) The poor, on the other hand, tend to give to religious organizations and social-service charities.

What do you think? We’d love to hear your experiences!
Are you surprised to hear to hear those with the least are giving the most?
Does increased wealth often lead to decreased compassion?
Why aren’t the rich giving to charities that primarily serve the poor?

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Comments

  1. Theresa C. says

    From my own personal experience (with rare exception), the people I have known in my life with money are less likely to part with it. It is the ones who have the least amount of money that are the first to donate for situations at work (i.e., if a co-worker has had a death in the family and the people in the department take up a collection for flowers).

    It truly doesn’t surprise me that those with the least give the most. I hadn’t thought about the compassion part of giving but it may be because those without know what it is like to go through difficult times and can relate more to those who are suffering in one form or another financially.

    Again, my personal opinion, but the wealthy haven’t had to struggle to make ends meet. If they cannot relate to a situation, how can they possibly understand it. The wealthy do not know what it is like to live paycheck to paycheck and, in some ways, they don’t live in the “real” world. There may be no incentive for them to give to the poor.

  2. “…as wealth increases, compassion, altruism and ethical behavior decrease.”
    That is an outrageous exaggeration. You deduce that all “compassion, altruism and ethical behavior” is measured by % of income donated to charity? Further you imply that poor people have these qualities? My experience with people and money (I am a financial advisor) and lacking a reference to look at the statistics, I can’t say this makes sense to me. I have seen many different dynamics. Here are a couple from the top of my head.
    1) Lack of awareness. The ‘wealthier’ tend to not see the ‘poorer’ because they live in their wealthier community. We see that in our own A2 bubble. They are focused on their future and keeping up with the ‘jones’ and the ‘jones’ are really wealthy too.
    2) Nobody wants to think they are wealthy. Everyone I know from 1% to the poor thinks they are ‘middle’ class. The VERY poor think they are ‘lower’ middle class, the VERY rich think they are ‘upper’ middle class. The top 20% in household income earn $105k.* A 2-income household of a typical teacher and autoworker earn this much. Yet I believe if you asked them to read this article they would not think they were the ‘wealthier’ people referenced in the article. They feel they are ‘barely getting by’. And who would want to carry the label of ‘wealthy’ those are the people who, according to you are lacking ‘compassion, altruism and ethical behavior’ other such myths perpetuated by your article.
    *http://en.wikipedia.org/wiki/Household_income_in_the_United_States.