Episode 27: Generosity Across Income And Wealth

The percentage of household income given to charity each year generally runs about 2 percent across most income levels, but goes up with wealth, according to a new research paper.

 

Credit: Jules Photo & Design

Benjamin Priday, a Ph.D. candidate in the Department of Economics at Texas A&M University, joined the Fresh Research podcast to discuss, “Generosity Across Income and Wealth Distributions,” a paper he wrote with Jonathan Meer, professor of economics at Texas A&M.

“We look at the likelihood of giving, the amount given, and then also the percent of income given. There’s important findings across all those outcomes but probably the outcome that interests most people is the percent of income,” Priday said.

In general, giving as a percentage of income is relatively flat across income levels, according to Priday, but the percent of income given increases with wealth. “And so that’s one of the main findings and that runs pretty counter to what other people have found. We show in our paper the reason that we find things so different than what other people have found is because that effect is typically driven by outliers and by omitting controlling variables like household wealth,” he said.

Giving tracks between about 1.4 percent and 2 percent of household family income, remaining “remarkably stable across income levels,” Priday said. The majority of households are grouped in the range of 1.7 percent to 1.9 percent levels. “And that’s pretty stable across income groups and really much more stable than what other people have shown in the past,” he said.

The highest giving, 2.01 percent, occurs in the lowest income group — households earning less than $11,000 annually. The majority of givers in that income group, however, are not actually very poor households. “There’s a good amount of people who are actually higher wealth people — maybe retirees who have a lower income but have accumulated assets and wealth that they donate out of instead,” Priday said. Those outliers will affect the averages for that group. The next highest level is 1.9 percent of income to charitable giving, and that comes from households earning $160,000 to $200,000 a year.

Priday used the Panel Study of Income Dynamics (PSID) to study those households but that data does not sample super-wealthy people. To examine households that earn more than $500,000 per year, he used Internal Revenue Services (IRS) Statistics of Income data. Households earning more than $500,000 gave more than 2 percent of income to charity, all the way up to 8.5 percent for households making more than $10 million a year.

Episode 30: Charitable Estate Gifts...

  • The NonProfit Times |
  • News |

It’s nothing new to fundraisers and planned gift officers that women and childless couples are the prime prospects for bequests and other estate gifts. New research suggests that those are still huge factors in the process but timing your nonprofit’s communication based on recency of gifts might be exactly the wrong way to go. Russell […]

Episode 29: Charity Navigator Encompass Rating System...

  • The NonProfit Times |
  • News |

Charity Navigator this month unveiled the first pillar of its new rating system. Years in the making, the Encompass Rating System (ERS) expands the number of charities rated from 9,000 to almost 160,000. President and CEO Michael Thatcher joins the Fresh Research podcast to explain the four “beacons” that will comprise the 100-point rating system: […]

Episode 28: How Civic Engagement Changes in Times of Crisis...

  • The NonProfit Times |
  • News |

The coronavirus pandemic has impacted the nonprofit sector in a number of ways. What effect COVID-19 might have on charitable behavior, like volunteering, remains to be seen. In this episode, we talk to Nathan Dietz, associate research scholar at the University of Maryland’s School of Public Policy and a senior researcher at its Do Good […]

Episode 27: Generosity Across Income And Wealth...

  • The NonProfit Times |
  • News |

The percentage of household income given to charity each year generally runs about 2 percent across most income levels, but goes up with wealth, according to a new research paper.   Benjamin Priday, a Ph.D. candidate in the Department of Economics at Texas A&M University, joined the Fresh Research podcast to discuss, “Generosity Across Income and […]

Episode 26: Best Nonprofits To Work For...

  • The NonProfit Times |
  • News |

“I feel I am valued in this organization.” “I can trust what this organization tells me.” “Most days, I feel I have made progress at work.” Those are three of the top 10 drivers identified in the 2020 Best Nonprofits To Work For. The special report appears annually in the April edition of The NonProfit […]

Episode 25: Coronavirus And Your Message To Donors...

  • The NonProfit Times |
  • News |

Regular programming for the Fresh Research podcast has been pre-empted this month to tackle the the issue that has impacted life worldwide the past few weeks: the coronavirus pandemic (COVID-19). The NonProfit Times recently hosted a webinar on mail and digital messaging to donors during COVID-19, which has led to widespread shutdowns of non-essential business […]

Episode 24: Appeals to Donor Benefits Versus Recipient Benefits...

  • The NonProfit Times |
  • News |

This episode of Fresh Research tackles the options when it comes to donors appeals. Should your appeal take aim at the donor and benefits to them, or instead remind them how their gift would benefit the community? John List, the Kenneth C. Griffin Distinguished Service Professor at the University of Chicago collaborated with  James J. Murphy […]

Episode 23: Do Thank You Calls Increase Charitable Giving?...

  • The NonProfit Times |
  • News |

Thanking donors for their gifts may be the right thing to do but does it lead to more gifts or bigger donations in the future? A thank you call to a donor for their gift may be just polite and considered the right thing to do but a recent study suggests that they won’t impact […]

Episode 22: The Women & Girls Index...

  • The NonProfit Times |
  • News |

About $1.60 of every $100 in charitable giving in the United States goes to an organization exclusively dedicated to women and girls. A new report estimates that more than 45,000 nonprofit organizations are dedicated to women and girls and receive about $6.3 billion in charitable contributions. That makes up about 3.3 percent of all charities […]

Episode 21: #GivingTuesday...

  • The NonProfit Times |
  • News |

#GivingTuesday will be here before you know it. The Tuesday after Thanksgiving — this year, Dec. 3 — is when the charitable sector has come together to help offset the consumerism of Black Friday and Cyber Monday. #GivingTuesday last year was responsible for raising an estimated $400 million. That figure has grown each year since […]

Episode 20: Effects of Tax Reform on Itemizers...

  • The NonProfit Times |
  • News |

The number of taxpayers who itemized last year has been in steep decline, according to the latest Internal Revenue Service (IRS) data. Why? And why is that important? Well, most charitable giving in the U.S. comes from itemizers. The Tax Cuts and Jobs Act of 2017 nearly doubled the standard deduction. Fewer than 1 in […]

Episode 19: Nonprofit Impact Matters...

  • The NonProfit Times |
  • News |

The nonprofit sector employs some 12.3 million people and accounts for more than 10 percent of the workforce in the United States. Payrolls exceed that of construction, finance and transportation. The number of nonprofits has increased by almost 75 percent between 2000 and 2016. There are 1.425 million nonprofits in the United States, including almost […]

Episode 18: A Closer Look At 2018 Giving...

  • The NonProfit Times |
  • News |

Giving USA estimated that charitable giving in the United States was $427.71 billion overall in 2018, a less-than-1-percent increase over the $424.74 billion for 2017, according to preliminary estimates from “Giving USA 2019: The Annual Report on Philanthropy for the Year 2018,” released last month. Adjusted for inflation, giving was actually down 1.7 percent over the […]

Episode 17: Are Millennials Really So Selfish?...

  • The NonProfit Times |
  • News |

Millennials often get blamed for killing entire industries, from cars and diamonds to malls, fast casual restaurants and cable television. Apparently, they spend so much on avocado toast that they can’t afford a mortgage (or that could be the result of their crushing college debt and coming of age in the Great Recession). But Millennials […]

Episode 16: M+R Benchmarks Study...

  • The NonProfit Times |
  • News |

The 13th annual M+R Benchmarks Study is chock full of data almost as far as the eye can see. That’s what happens when you analyze 4.4 million emails sent to 37.5 million email addresses, more than 7 million online gifts and $376 million raised, all from a variety of 135 nonprofits of all shapes and […]

Episode 15: Reciprocity Decays Over Time...

  • The NonProfit Times |
  • News |

Waiting a month to ask for a gift decreases the likelihood of a donation by 30 percent. That’s according to research on positive reciprocity that looked at more than 18,000 donation solicitations by a university hospital system. “Field study of charitable giving reveals that reciprocity decays over time” was published by Judd Kessler, associate professor […]

Episode 14: Donor-Advised Fund Grants During Recessions...

  • The NonProfit Times |
  • News |

Donor-advised funds (DAF) have become one of the fastest-growing vehicles for philanthropy in the past decade. They also have become a lightning rod in the debate about charitable giving, described by skeptics as a “Wall Street takeover of charity.” Other critics argue that that donors can receive a tax deduction for contributions to their DAF account but the […]

Episode 13: Anatomy of a Mega Merger...

  • The NonProfit Times |
  • News |

Two of the two largest data and information nonprofit organizations in the United States announced a merger on Feb. 1. The Foundation Center and GuideStar will become Candid after almost two years of discussions on a merger that has its origins at least a decade in the making. Brad Smith, president of the Foundation Center, will be president of Candid, […]

Episode 12: Gilded Giving + Giving Circles...

  • The NonProfit Times |
  • News |

More charitable giving than ever is coming from high-income households while the donor universe has been shrinking for years. Those are some of the concerns identified in “Gilded Giving 2018: Top Heavy Philanthropy and Its Perils to the Independent Sector and Democracy.” Chuck Collins directs the Program on Inequality and the Common Good at the […]

Episode 11: Volunteer Rates + The Philanthropic Closet...

  • The NonProfit Times |
  • News |

Part 1: Robert Grimm & Nathan Dietz Where are America’s volunteers? That’s literally the question posed, and answered, by a new study from the Do Good Institute at the University of Maryland’s School of Public Policy: “Where Are America’s Volunteers? A Look At America’s Widespread Decline in Volunteering in Cities and States.” Robert Grimm, director of the Do […]