Thursday, May 28, 2009

America's Poor Are Its Most Generous Givers

The generosity of poor people isn't so much rare as rarely noticed, however. In fact, America's poor donate more, in percentage terms, than higher-income groups do, surveys of charitable giving show. What's more, their generosity declines less in hard times than the generosity of richer givers does.
I have read about this before that the poor give more as a percentage of their income than the rich, but it always surprises me. Why would this be the case?

The article lays out many plausible reasons, but I would like to add two more.

But before I do so, I think it should be noted that while the poor give more as a percentage of income, in terms of total amount given, they give much less, with the lowest income group averaging $453 and the highest 20% $3,337. Those in the lowest 20% of income account for 6.5% of all dollars given, while those in the top 20% account for 48%.

Google Spreadsheet

One reason that might explain why the poor give more is that it is a collective way to save money. When times are good you help out those around you, and when times are bad they help you out. Banks could be used to accomplish the same thing in an individually, where you would saving your money in good times and then taking it out in bad times.

A second reason that might explain this is that by giving more than their fair share, they make it easier for others to give to them. Those in the lowest 20% of income give on average $453, but the average person gives $1,388. If all donations were evenly distributed to all people (and likely they would skew more towards those of lower income) then for every dollar a poor person gives, they get back 3 times as much or a 200% "return" on giving. A slightly different take on this would be that because they see how much are given they feel like they too should give as much as they can.

via McClatchy


Audacious Epigone said...

Notice that the income measurements are in pretax dollars. That's huge, since the lowest quintile is paying nothing in income taxes, and most of them are actually getting money back in the form of credits. Knock the highest quintile down to about $120k, which is probably a good ballpark estimate of real income, and the bottom quintile up to $12k, and we're looking at 2.8% for the top quintile and 3.8% at the bottom. Still a gap though, just not as large.

Leah Iona said...

I don't understand you first reason as to why the poor donate more than the rich. However the second reason you give doesn't make sense because of the big IF ("IF all donations were evenly distributed to all people") What information do you have that anyone gets a "return" on the money they donate? It's all bollocks. The term generosity, which is what we are measuring, implies giving without expecting anything in return. People who donate money or time or whatever other resources they have, do it out of compassion for others in need. The original article you quote gives more accurate reasons as to why there is a difference in giving percentages. It is important to look at what they are giving to in order to determine why.

Fat Knowledge said...


Good point, although are you taking payroll taxes into account as well with your numbers?


First, I agree with the reasons in the article for giving. I just felt they were well stated there and no need to restate them.

Second, while I do think that some people give for purely altruistic reasons, I am not convinced that everyone does. I think that some giving is given because something in return is expected. If you don't believe me, try not giving any Christmas presents this year and see if people that give you gifts are happy just to see the smile on your face when open your gift, or if they are upset because they expected to get something in return. I know my sister still remembers when we were 10 years old and I didn't get her a Christmas gift and she got me one (I was under the impression we weren't exchanging).

My two additional reasons for giving look at possible rationales that take into account some kind of return. Sticking with the Christmas analogy, a kid might spend a larger percentage of their savings on presents for their parents then the parents do for the children, but the children still get a good return on investment on Christmas gifts, getting much more in absolute terms than they spend. It is still all giving, but there are some aspects that don't fit in your "giving without expecting anything in return" definition.

I don't know which of the reasons (those in the article, or those I put forth) explain more of why the poor give more, but I don't think that mine can be completely ignored.

Leah Iona said...

thanks. I understand your point a little better now.

OneSTDV said...

I imagine there's a pretty good reason connected to religiosity. The absolute poorest people (many of them black who tend to be the most religious) tend to be heavily religious and thus are almost required to donate to religiously based charities or tithing to the church.

While I don't think this explains the entirety of the data, it seems like an important variable.

Fat Knowledge said...


I think you are right that the poor are more religious and that the more religious you are the more you give. But, even at churches the poor give more than the rich. Why is this? I don't know but I think my two reasons could explain even church giving as the poor are more likely to use the services that churches provide.

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