Yesterday we touched on charitable giving, the point of making loads of money and what you do with it. I thought I would digress a bit and discuss giving and the rich.

A study two years ago found that a large share of Americans making $200,000 or more give only 2.8 percent of their income to charity. Other studies show that multi-millionaires donate only about one percent of their wealth to charity (though billionaires tend to give a higher percentage). So why don’t the rich give more? The 2013 study, by SEI Private Wealth Management, found that 82 percent of wealthy families believe that having more money means you have a greater obligation to be philanthropic. “Please, God, make me more generous, but not this year”. Respondents worth $10 million or more listed three reasons for not giving more:

1. First, nearly half said they needed more confidence “that the level of their wealth would continue to support their lifestyle and their family.”
2. Second, they said they would give more if the markets improved.
3. Finally, a third of those polled said they needed to “find something they could be more passionate about.”
(Adapted from the CNBC website, Robert Frank, CNBC.com, 11 Mar 2013)

My comment: 2.8% is a pathetic amount of money to devote to charity if you are making more than $200,000. I would be ashamed to admit to such a figure. The fact probably is that many of these people are in reality insecure. No amount of money will make them feel secure. Money is most their chief interest and their badge of identity and status. Were they to lose their money (even part of it) they would panic and feel less masculine/feminine (whatever). Their friends are rich and they all are by nature competitive. Losing face is unpleasant for them. Secondly, I wonder if they are giving any more than 2.8% now the markets have improved in the US? As for finding causes to be passionate about, words fail me! What a reflection upon their values and their imagination! There are a host of other wonderful causes, too many to do justice to.

The fact is that donations to charity are largely deductible for tax purposes, so the donors are not “losing” much by giving. The parsimony is more a matter of attitude and habit mind than anything else. Having said all this there are hugely generous people who do good works with their money in all sorts of fields of endeavour – not all rich people should be tarred with the same cheap brush. Americans in particular have a tradition of giving to their churches and universities which is less the case across the Atlantic.