Last week, Apple CEO Tim Cook announced that he will give his fortune to charity, joining the ranks of Bill Gates, Warren Buffett, Mark Zuckerberg, and other uber rich benefactors. It seems like the wealthy are, admirably, giving away their fortunes left and right to good causes.
Judging by the number of university buildings and institutions that bear names like Rockefeller and Carnegie, it might seem like charity relies on the generosity of the super rich. But that's not the case.
Since the recession, the rich have benefitted most from financial gains, but interestingly, at the same time, it's the poor who upped their giving during that period while higher-income people gave less, according to the Chronicle of Philanthropy.
Using IRS data, the Chronicle found that between 2006 and 2012, the lowest-income Americans bumped up the share of their incomes that they gave to charity, but as they went up the income ladder, the charitable giving grew smaller and smaller.
This doesn't mean that poor Americans give more overall to charity -- the top one percent of tax returns (around $500,000 and more) in 2011 amounted to nearly one-quarter of all charitable contributions, according to the 2011 Congressional Budget Office.
But poor Americans gave at a much higher ratio. In 2011, those same wealthiest Americans, with earnings in the top 20 percent, gave an average 1.3 percent of their income to charity. The bottom 20 percent gave 3.2 percent. And, unlike, wealthy donors, poorer givers don't take advantage of big charitable tax deductions because they don't itemize deductions on income-tax returns.
Why do poorer people tend to give more? One reason might have to do with how they give -- the poor tend to give to churches and other organizations that directly help the needy with basic needs. Wealthier people tend to give to universities, the arts, or organizations that fight disease.
Empathy might be a factor, says Stacy Palmer, editor of Chronicle of Philanthropy. Lower-income people seek to help others like themselves.
"In part it's what you're familiar with and what you've seen and where you see the need," she told Vox. "One of the reasons in the recession years we saw the lower-income people give generously is they saw people around them losing their jobs and (go) underwater on their homes."
At the same time, the Chronicle found that in 2012, that the rich who live in isolated neighborhoods tended to give less to poorer people, likely because they have little contact and less awareness of the plight of the poor.
A possible result is that as income inequality grows, rich donors might continue to cut back on spending for the poor, and the philanthropic sector might favor the causes of the wealthy -- schools, museums, the arts.
While those are still worthy causes, it raises interesting questions about the safety net for the poor, who might increasingly become dependent on each other, especially if government programs like food stamps are cut back.
The message here isn't that wealthy Americans are a bunch of Scrooges," writes Danielle Kurtzleben of Vox. "The real story is much subtler: if the nation becomes more unequal and economically segregated — or, put another way, if Americans' incomes move apart and the rich and poor increasingly live apart physically — it becomes much easier for people to be blind to how people outside their own class are living."
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