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The Philanthropic Middle-Class, The Miserly Rich

Are the rich giving their fair share to charity? Should they give more? Do the poor and middle-class have a gripe with the rich? The Chronicle of Philanthropy recently finished a study of charitable spending based on IRS data. What they found could be considered somewhat disheartening. Households earning between $50,000 and $75,000 a year gave an average of 7.6 percent of their discretionary income to charity. That compares to 4.2 percent for people who make $100,000 or more. In some of the wealthiest neighborhoods, with a large share of people making $200,000 or more a year, the average giving rate was 2.8 percent.

Looking at the percentages can be misleading, though. Looking at the actual numbers may make things clearer. The households making $75,000 a year gave $5,700 on average. Households making, let’s say, $150,000 a year gave $6,300. I’d throw out the figure of $200,000, because that is qualified by saying the wealthiest neighborhoods which most residents make more than that amount, not necessarily all those who make over $200,000. So if you’re making $75k a year, you donate almost as much as someone who makes $150k. Still doesn’t help dissuade the upper-class being miserly perception, but is a little better than when compared to the percentages. Another factor to remember is that those making more than $100,000 accounted for more than half the charitable donations…and those who make under $100,000 contributed the other half. You take into consideration that the lowest incomes probably will not donate much, if anything, that still makes the middle class the most philanthropic.

Some caveats: the rich who are not heavily clustered together, or are in neighborhoods that include lower (making less than $200k) do tend to donate more. Also, these deductions are only the ones listed on tax returns. There may be other donations not listed because it does not make sense to itemize those deductions, or they may have maxed out their allowable deductions. Another factor in how much is contributed is by region. Those in the Bible Belt tend to give more on average than the east coast. In addition, on a political bent, Red states give more than their Blue states counterpart…by percentage of income, not amount.

What does this all mean? That the rich don’t claim as many charitable donations as the middle class. Should they give more? Maybe, but it is their money, and they can do whatever they want with it, as long as it’s legal. I don’t want someone to tell me what to do with my money, and I doubt most people would like it either. Do the other classes have a gripe? No, why should they? If they think the rich are less charitable than them, then they are allowed to give less if they want to. Should the rich distribute their wealth more? Isn’t that more Socialist/Communist? This is not about how much they are being taxed (or not taxed), but how much they are giving to charities, and then deducting from their taxes. If the results would have been the other way, that the rich were donating more, stories would have read that the rich are deducting more from their taxes. So what do the numbers really mean here? The middle-class donates more, and deducts more from their taxes. The upper-class donate less, and deduct less from their taxes.

So why did I title this the way I did? Because if I had titled it “Numbers Lie”, how many of you would have really read it? The point of the article is when candidates and companies throw out numbers, read into them; because numbers can justify almost any position by the way they are presented or conducted. So next time Rush Limbaugh, Glenn Beck, Barak Obama, Ezra Klein, Arianna Huffington, Mitt Romney, et al, throw some statistics out, read into them and find out what they actually mean.


For more info:

http://philanthropy.com/section/How-America-Gives/621/, http://finance.yahoo.com/news/rich-less-charitable-middle-class-183805573.html

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