An eccentric millionaire writes a check for one million dollars and gives it as a gift each week, delivered by a faithful and discreet personal assistant, to a worthy recipient. The taxes have already been paid. All the recipient has to do is promise not to reveal the source of his or her fortune.
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This was the premise of the popular television drama, The Millionaire, that ran from 1955 to 1960. It captivated the imagination of millions of viewers. What would you do if you received such a gift? Currently a reality series called The Secret Millionaire documents the undercover activities of philanthropic millionaires who find worthy recipients for thousands of dollars. If you were fabulously wealthy, would you unselfishly give your money away?
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“Surplus wealth is a sacred trust, which its possessor is bound to administer in his lifetime for the good of the community,” said Andrew Carnegie, one of the most generous and influential philanthropists of the 19th century. By distributing his wealth with a vision for improving the lives of others, Carnegie's fortune was responsible for financing major institutions that include a university, a hospital, and an entire li ary system.
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As we commence the second decade of the 2lst century, Americans look to the current crop of billionaires to provide financial support for charitable causes, reasoning that those with the most to give will, of course, be the most generous. After all, Warren Buffet, one of 40 billionaires and their families who have pledged to give at least half of their wealth to charity, has often been quoted as saying, “If you're in the luckiest one percent of humanity, you owe it to the rest of humanity to think about the other 99 percent.” Surprisingly, however, it is not always the wealthiest amongst us who are the most generous.
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Several studies (including one by Independent Sector, a nonprofit organization focused on charitable giving) as well as surveys from the U.S. Bureau of Labor Statistics have revealed that it is actually the poorest fifth of American households (households earning less than $25,000 per year) who contribute the highest percentage of their income—approximately 4.2 percent to charities, whereas households earning more than $75,000 give approximately 2.5 percent of their income. This disparity may be surprising since high income earners gain tax deductions when they give to charity—deductions that yield more savings as their income moves into the larger tax ackets.
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Studies have shown that lower income Americans are more likely to be religious. They are also likely to be members of congregations that tithe (make weekly donations a requirement). These same people are also likely to be sending money to needy relatives overseas that is not being tracked—another indicator of the poor's generosity.
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Paul K. Piff, a Ph.D. candidate in social psychology at the University of California Berkeley, along with Michael W. Kraus, published an article online in the Journal of Personality and Social Psychology sharing their findings in studying the difference in generosity between “upper class” and “lower class” subjects. Key ingredients for generosity seem to be empathy and compassion. Lower income people were found to possess more traits of being generous, charitable, and helpful to others. Further studies are underway to determine whether the desire to be useful to others may be part of a desire to establish worth. Perhaps with more assets, people are less desirous of proving their worth to others.
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For households earning more than $100,000, the percentage for giving starts climbing up to 3.1 percent. And while 3.1 percent is far from the 50 percent pledged by the 40 billionaires, three percent of one million dollars is 30,000 dollars—a sizeable donation. It is calculated that households earning more than one million dollars per year account for approximately half of the charitable donations in the U.S. Some of those philanthropists, like TV's Millionaire, prefer that their contributions remain anonymous.
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For the rich and poor, giving often begins with volunteerism.Volunteering enables one to see firsthand what an organization needs. A number of philanthropists and community leaders interviewed for this article agreed that many of their most generous donations come from individuals who initially gave time and talent when launching their professional careers. Later, after achieving financial success, they are now providing substantial monetary support.
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Time, talent, or money? Today's philanthropist often gives all three.
