The Charity Gap

But there is a surprising disconnect between Americans' philanthropic aspirations and their charitable giving. The vast majority of givers believe the bulk of their donations help those less fortunate than themselves. In fact, less than one-third of the money individuals gave to nonprofits in 2005 went to help the economically disadvantaged, according to a new study commissioned by Google.org, the philanthropic arm of Google. Of the $250 billion in donations, less than $78 billion explicitly targeted those in need.

The analysis, carried out by the Center on Philanthropy at Indiana University, concluded that only 8% of donations provide food, shelter or other basic necessities. At most, an additional 23% is directed to the poor -- either providing other direct benefits (such as medical treatment and scholarships) or through initiatives creating opportunity and empowerment (such as literacy and job training programs).

The "charity gap" is even wider among the affluent. But people who earn more than $1 million per year give only 4% of their donations for basic needs and an additional 19% to other programs geared toward the poor. For the wealthiest Americans, education and health care comprise the majority of donations. Yet in education, fewer than nine cents per dollar pays for scholarships; in health, only 10 cents per dollar funds programs targeted to the needy.

For people with annual incomes below $100,000, religious giving dominates, comprising two-thirds of all donations. While the church food drive may be in donors' minds as they reach into their pockets, less than 20 cents of every dollar given to religious organizations funds programs for the economically disadvantaged.

The "charity gap" becomes more acute as the scale goes global. The most generous estimate shows that only 8% of U.S. individual donations supports international causes of any kind.

Interesting. I hope we see more thoughtful analysis like this from Google.org.

via WSJ via CharityFocus Blog