Why giving the rich a tax break will not work as a strategy to fight poverty!

The New York Times magazine ran a story about ‘the Charitable Giving Divide’ this weekend, validating what those of us who raise money for social causes know to be true — that the wealthy give a smaller percentage of their total income to charitable giving than do the poor. In fact, households making less than $25,000 a year gave 4.7% of their income to charity, while households making $75,000 a year or more gave away just 2.7% of their income! Community Chest card from MonopolySo while that 2.7% of a higher income might mean more actual dollars than the 4.7% of a lower income, it also means that as a percentage of their income, wealthy households give less than low-income households. At a time when poverty rates are rising, we need more resources to meet the great needs of our community.

So while I applaud Bill Gates’ commitment to give half his wealth away, I hope that this will not be used as proof or evidence in support of extending tax cuts for the wealthy. Giving the wealthy tax cuts clearly does not mean that they will turn around and donate these funds. And when they do donate, we also know that it often does not go to those in the most need:  “instead it was mostly directed to other causes — cultural institutions, for example, or their alma maters…”.

Why do the wealthy give less and the poor give more (as a percentage of their overall income)? Paul Kiff from the University of California at Berkeley found in a study that he conducted “that if higher-income people were instructed to imagine themselves as lower class, they became more charitable. If they were primed by, say, watching a sympathy-eliciting video, they became more helpful to others — so much so, in fact, that the difference between their behavior and that of the low-income subjects disappeared. And fascinatingly, the inverse was true as well: when lower-income people were led to think of themselves as upper class, they actually became less altruistic.”

Hmm? So we all should go out and make ‘sympathy-eliciting’ videos in order to fight poverty? Sure let’s do that, but I would also encourage a few more actions as we head into this next school year!

1) Advocate for NOT extending the tax cuts for the wealthy. It’s clear that these tax cuts do not mean that there will be more resources for those living in poverty.

2) Give more yourself! If folks making less than $25,00o a year are giving 4.7% of their income to charity, clearly those of us making more than that can at the very least match that! For example, I have made a personal commitment to give at least 5% of my income to charity each year (I usually give about 8% but commit to no less than 5%).

3) Teach young people about giving and the importance of giving. Check out the program I direct, Penny Harvest. Your child’s school can participate in this youth philanthropy and service learning program.

4) Volunteering is much more powerful than ‘sympathy-eliciting’ videos. Check out volunteer opportunities with Solid Ground, or get your workplace involved in United Way’s Day of Caring.

5) Share this article with friends and family, and encourage them to commit 5% of their income to charity!

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