[Dialogue] America the charitable: a few surprises

Mon Nov 27 12:21:54 EST 2006

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from the November 27, 2006 edition -
http://www.csmonitor.com/2006/1127/p01s01-usec.html 

America the charitable: a few surprises 

By Mark
<http://www.csmonitor.com/cgi-bin/encryptmail.pl?ID=CDE1F2EBA0D4F2F5EDE2F5EC
EC>  Trumbull | Staff writer of The Christian Science Monitor 

Everybody knows Americans are big givers. But their charitable impulses keep
generating surprises. 

Consider just a few conclusions from recent research:

. Charitable giving plays an even larger role in the economy than is
suggested by some $260 billion in annual contributions. Each dollar of
giving appears to create $19 of extra national income, according to a book
released this past weekend.

. Demand for nonprofit services gets proportionately bigger, not smaller, as
a locality's income rises, a Federal Reserve economist finds.

. The philanthropy of the wealthy may not hinge on tax incentives to the
degree many believe. In one new survey, a majority of wealthy givers say
they would contribute the same amount if the estate tax were abolished.
Ditto, they said, if they could no longer deduct the value of gifts from
their taxable income.

These disparate studies are shedding light not just on who gives but also on
why they give and what their actions mean to society. Often, the conclusions
run counter to expectations.

"This is supposed to be the start of a conversation. It's the first word,
not the last word," says Arthur Brooks, referring to his new book on
charity, called "Who Really Cares." "We need more people thinking about [the
study of charitable giving] in a serious way."

He and other experts say that by understanding charity better, Americans can
learn how to encourage more giving. The result would probably be a healthier
and wealthier society.

Of course, it's not as if American philanthropy has never been studied
before. A number of institutions track the nonprofit sector full-time in one
way or another. But the data on charity-linked activities are far less
complete - and less systematically analyzed - than for areas such as
government and private industry.

One thing that's long been known: The US leads the world in levels of
charitable activity. The pattern runs from the rich, steeped in long
tradition of philanthropy, to the poor. Those making $20,000 or less a year
give away more, as a share of their income, than do higher income groups.

Americans donate their time as well as money - some $150 billion worth
annually (measured by using an estimated average value of $18.04 per hour).

"I see a great commitment," says Karen Rivers, who recruits helpers for the
Colorado branch of Volunteers of America in Denver. "We just were inundated
with people who wanted to volunteer for Thanksgiving Day."

She had to turn volunteers away as the group served holiday meals to about
3,000 homeless and others in need.

Some experts see charity as a defining trait of the US, more than
consumerism or business. But those forces may be intertwined.

For one thing, many nonprofits are selling services - from healthcare to
classical music - in a marketplace alongside for-profit rivals. By many
measures, they are successful.

For example: As personal incomes rise in a given county, the income of
nonprofits seems to rise even faster, says Rob Grunewald, an associate
economist at the Federal Reserve Bank of Minneapolis, who has analyzed
counties in 47 states. This suggests that not-for-profit activities are what
economists call a "superior good," something people want to buy more of (or
donate more to) as their incomes rise.

But ties between charitable ventures and the economy hardly end there.

In his new book, Dr. Brooks points to evidence that charity is no mere
peripheral activity. It pays off for society in ways that may transcend the
rates of return on many traditional investments. Why?

It's not just that charity helps those on the receiving end, says Brooks, an
economist at Syracuse University in New York. It also strengthens the
cohesion of society at large. Moreover, it appears to make the givers
themselves more successful, possibly because the activity transforms them
somewhat into better or happier people. Whatever the reasons, he finds that
higher income tends to push up charity - and that greater charity tends to
push up income.

Another provocative conclusion is that conservatives are better givers than
liberals - a theme that is likely to draw close scrutiny. This pattern is
less about politics, he says, than about charity-linked lifestyles that are
most common to people who call themselves conservatives: religious
commitment, marriage and children, and entrepreneurship.

Still, Brooks's main point is that more Americans, regardless of ideology,
should embrace giving as a tool for progress. He quotes Proverbs: "One man
gives freely, yet gains even more; another withholds unduly, but comes to
poverty."

Many who do charitable work can relate to that. Pier Penic works in public
relations, but her passion is what she does for free as the founder of
Culture at Home, a support group near Washington, D.C., for mothers who are
home-schooling their kids. "I'm doing more here than I would at a corporate
job," she says. "I love to see results."

Her story echoes some of the common forces that motivate people to give time
or money to charity: First, she identifies with challenges facing
home-school moms. In her case, the feeling is amplified because she herself
is one of those moms. Second, she wants to make a difference. Third, she
draws satisfaction from the effort to help.

These forces are among the core motivations that foster actions of
generosity beyond the sphere of one's family circle, says Paul Schervish,
who heads the Boston College Center on Wealth and Philanthropy. "There would
still be a need for philanthropy, even if our economic needs were all taken
care of."

The urge to make a difference, and to take satisfaction in it, outweighs
monetary considerations. For example, a survey of 945 ultrarich individuals
released last month by Bank of America and the Center on Philanthropy at
Indiana University found that slightly more than half would give the same
amount regardless of whether the estate tax or deductions for charitable
giving were repealed.

None of this means that tax policy is trivial for charitable giving. But the
survey suggests that Americans' penchant for giving isn't driven primarily
by tax breaks.

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