RandomSpotter had the opportunity to participate in a charitable event yesterday. A community church held a three-peat drive for 3 different organizations that distribute supplies to the needy. This got me thinking about charitable giving in the US, especially in light of what I view as forced giving through government entitlements. I wanted to answer for myself whether it doesn’t make more sense for Americans to just increase charitable giving to save the significant taxes that will continue to be funneled to government “causes.”
One report from Sparxoo indicates that 65% of American households give to charity, with an average household contribution of $2,213 (2008-2011). Of those who give, the top-earning ten percent contribute over 25% of the funds donated, and 98% of high income individuals contribute to charities. 75% of the estimated $300 billion donated each year comes from individuals, 13% from foundations, 8% from bequests, and 4% from corporations. The US has the highest rate of giving among all countries, donating 1.65% of GDP to charitable causes (Forbes). Let that all sink in and you see that we are a giving nation already, even if we could and should grow the number of Americans who give.
Observing the above, it’s puzzling that a country with the third highest government revenues from personal income taxes (38%) and relatively high effective corporate tax rates (around 13%) should need to continue to push ever-harder for government programs to solve social problems. It seems to me that a fallacy we’ve embraced is the belief that government should solve every major problem of our citizens. One undeniable fact of life is that it comes with hardship. Government can’t make us happy any more than it can make us pain-free or healthy. There is an ocean of evidence to prove that government programs are wasteful and inefficient in comparison with not-for-profit organizations serving the same goals. To burden our government and tax structure with a philanthropic mission is lunacy. Although I’ve not seen them, I’m sure there are studies that indicate an inverse relationship between growth in charitable giving and growth in government social programs. That’s got to be the most reasonable answer. Of course, volunteerism goes hand in hand with giving. It costs relatively little in comparison to donations, is available to most everyone, and is a tool that expands the value of charitable contributions exponentially.
Therefore, it would fall upon us, individually and collectively, outside of government to do the heavy lifting of philanthropy and charitable support. And doesn’t it make a lot more sense for each of us to decide who gets the benefit of our time and dollars? It does to me.