Public debates on philanthropy link charitable giving to wealth. In the media we hear a lot about the giving behavior of billionaires – about the giving pledge, the charitable foundations of the wealthy, how the causes they support align their business interests, and how they relate to government programs. Yes – the billions of tech giants go a long way. Imagine a world without support from foundations created by wealthy. But we hear a lot less about the everyday philanthropy of people like you and me. The media rarely report on everyday acts of generosity. The force of philanthropy is not only in its focus and mass, but also in its breadth and popularity.
It is one of the common remarks I hear when family, friends and colleagues return from holidays in ‘developing countries’ like Moldova, Myanmar or Morocco: “the people there have nothing, but they are so kind and generous!” The kindness and generosity that we witness as tourists are manifestations of prosociality, the very same spirit that is the ultimate foundation of everyday philanthropy. And also within our own nations, we find that most people give to charity. Why are people in Europe so strongly engaged in philanthropy?
The answer is trust
In Europe we are much more likely to think that most people can be trusted than in other parts of the world. It is this faith in humanity that is crucial for philanthropy. We can see this in a comparison of countries within Europe. The figure combines data from the World Giving Index reports of CAF from 2010-2017 on the proportion of the population giving to charity with data from the Global Trust Research Consortium on generalized social trust. The figure shows that citizens of more trusting countries in Europe are much more likely to give to charities (you can get the data here, and the code is here). The correlation is .52, which is strong.
Egalité et fraternité
One of the reasons why citizens in more trusting countries are more likely to give to charity is that trust is lower in more unequal countries. Combining the data on trust with data from the OECD on income inequality (GINI) reveals a substantial negative correlation of -.37. The larger the differences in income and wealth in a country become, the lower the level of trust that people have in each other. As the wealth of the rich increases, the poor get increasingly envious, and the rich feel an increasing urge to protect their wealth. In such a context, conspiracy theories thrive and institutions that should be impartial and fair to all are trusted less. The criticism that wealthy donors face also stems from this foundation: those concerned with equality and fairness fear the elite power of philanthropy. Et voila: here is the case why it is in the best interest of foundations to reduce inequality.
In a new paper, we used data from the Giving in the Netherlands Panel Survey to examine the relationship between spending money to outsource household tasks and happiness. The key result is that those who do spend money in this way are happier. The paper was published in PNAS and is freely available through the open access option. The paper is lead-authored by Ashley Whillans (Harvard Business School), and co-authored by Elizabeth Dunn (University of British Columbia), Paul Smeets (Maastricht University) and Michael Norton (Harvard Business School). All study data and study materials are available through the OSF (https://osf.io/vr9pa/). Hypotheses for the analyses were preregistered here.
Click here to read the paper.
A new version of the User Manual for the Giving in the Netherlands Panel Survey is now available: version 2.2.
The GINPS12 questionnaire is here (in Dutch).
Filed under data, empathy, experiments, helping, household giving, methodology, philanthropy, principle of care, survey research, trends, trust, volunteering, wealth
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How generous are the wealthy? Surely wealth enables citizens to give higher amounts to charitable causes, but does wealth also make people more generous? Do the wealthy give a higher proportion of their income?
Using data from the High Net Worth supplement to the 2012 wave Giving in the Netherlands Panel Survey we can answer this question. Nearly all of the 1,307 respondents (95%) reported donations to charitable causes in the calendar year 2011. Average giving amounted to €5,195.
Donations represent 1.88 of annual income and 0.3% of total wealth among respondents in the sample. The proportion of income donated by the wealthy respondents is twice the proportion donated by respondents in the sample representative of the Dutch population (0.94%).
Among the respondents in the HNW supplement, donations as a proportion of income decrease with income, from 2.2% of income in the first quintile to 1.6% in the top income quintile.
Donations as a proportion of wealth also decline with wealth: in the first wealth quintile, donations represent 0.7% of wealth, declining to 0.1% in the top wealth quintile. As a proportion of income, however, donations increase with wealth. In the first wealth quintile, donations represent 1.7% of income; in the top wealth quintile, donations represent 2.5% of income.
The source of wealth is consistently related to the level of generosity: both measured as a proportion of income and as a proportion of wealth, donations are highest among ‘New Wealth’ respondents, who earned their wealth primarily with their own business. In contrast, amounts donated were lowest among those who inherited wealth.
Methodology – Data presented here are based on a sample from a privately held database provided by Elite Research of 10,000 addresses in the Netherlands with wealth exceeding €60k. Fieldwork took place in May-June 2012 through an online survey and written questionnaires; response rate: 13%.