Where Do You Give Charity, and Why?

This is the time of year when a lot of people give to charity, in part because of the holidays and in part because of year-end tax considerations.

Below you will find a few loosely connected observations about charity and then, at the end, some questions for all of you. It is probably not fair that I am not answering the questions myself, but the reason I’m not is that I think anonymity is an important part of giving (consider Maimonides‘s hierarchy of charity, e.g.). And, since this is my blog, I inevitably cannot be anonymous — but when you write a comment, you can if you want.

1. For starters, we have blogged in the past about: the economics of street charity; conservative vs. liberal giving; a charity called Smile Train that seems to be a model of efficiency; and peer-to-peer lending, which, along with microcredit, is arguably a form of charity.

2. Accountability is a big issue for many, if not most, people who give to charity. This article in yesterday’s Wall Street Journal discusses how people can perform due diligence on the charities they are considering. Obviously, people want to know how much of the money they are donating is going to the cause they care about versus how much is going toward buying office chairs, fact-finding missions, and ballroom dances.

3. I believe one reason that so many people give to charity is that, even though a great portion of their taxes goes to what could legitimately be called charitable causes, there is a complete and utter disconnect between the feeling of paying taxes (an onerous obligation) and giving to charity (an inspiring and self-satisfying act). But pretend for a moment that you are in a 40 percent tax bracket; don’t you ever find yourself thinking, “Hey, I already donate 40 percent of my income to various causes that have little to do with my personal well-being, so why should I give a penny more to ‘charity’?” (Although I don’t want to open up a tax can of worms, click here if you think that people who make a lot of money pay too little tax, and/or here if you think they don’t pay for their fair share of government services.)

4. Following from No. 3, I wonder what would happen if it were possible to have even a portion of our personal taxes targeted toward causes, or at least general areas, that we care about. Just think: if you could choose on your 1040 a number of options for where your tax money would go (feeding poor children, improving auto safety, providing medical services for the elderly, giving aid to military families, etc.), even if your choice only marginally altered the direction of your tax payment, would you feel more satisfied in writing that check? I suspect the answer is a firm yes.

5. Friends and I often have discussions about the ancient religious command to tithe, or give at least 10 percent of your income. One thing I find interesting about such discussions is a point that never comes up: that when tithing was first instituted, there was nothing remotely like the current tax system, whereby 30 or 40 or even 50 percent of your money was already being “donated.”

And now for the question(s):

Whom do you give to, and why? How important is anonymity — or, conversely, how important is the recognition? How consistent are you in your causes, and what makes you change your thinking? Do you prefer microcharities and/or people you know, or do you prefer big institutional charities, and why? How important is the tax deduction in your giving — and, since it rewards money but not time, does it make you less likely to donate your time? What are some particular charities that you love? If you were the King of Charity for a day, what would you change about the state of charitable giving?

I am not looking to use your answers as research per se, although I wouldn’t be surprised if many of them are interesting enough for me to follow up on in some way.

Thanks for your input, and happy holidays to all.

[Addendum: Reading through some of the comments posted in the first couple of hours, I realize I should have also asked this: For those of you who routinely don’t give to charities, please say why.]


Dan

If your time is worth more than the value you add by giving it you shouldn't volunteer. You are better of donating your money and creating a job for someone who needs it. This is assuming of course that you don't receive any other benefits (enjoyment, recognition…) I do volunteer once a year because I get a paid service day.

Chris

I give primarily to Atheist/Humanist organizations. The way I figure it, everyone cares about feeding the hungry, but only atheists are really going to fund atheist organizations. That is, there's no one else to do it.

For me, the main point of all of this is to make nonbelievers more visible in society so that we get a place at the table and nonbelief becomes totally destigmatized. Wouldn't it be great if folks running for office were forced to give some thought before using religious pandering - well, they would if it were well known that there was also a large group of nonbelievers out there who might be turned off by it. I think that would go a long way toward balancing things out in our civic arena.

the Gooch

I tend to ask most people I meet to which charity they would donate money if they were to win the lottery. Never has anyone answered the US Dept. of Health and Human Services or Housing and Urban Development. I think we all realize what an ineffective way that is to put our own money to use...but when it's everybody else's money, we don't think that hard.

Monetarily, I give mainly to an organization that was founded by colleagues of mine that works at a grassroots level with economically disadvantaged kids. I do so because of my familiarity with their cause and operations. I would never give to the United Way or other large default umbrella group--I tried figuring out where my money would go if I gave to the local United Way, and it was too much for me to figure out.

The tax laws not only push me to donate money more than time, they push me to donate appreciated assets more than money. This strikes me as inefficient, as I'm sure most organizations would rather have me give money than shares of Baidu.com, and they'd much rather have me give time than money.

I wonder what would happen if the end of the tax year didn't coincide with Christmas--where would we see a spike in charitable giving? Even as a Christian, I assume the spike in December is due to oh-crap-it's-the-end-of-the-year-and-I-need-to-reduce-my-taxes-itis and not an outpouring of Christmas spirit.

My #1 favorite charity is the DREAM program:
http://wwww.dreamprogram.org

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Lisa from New York

I donate cash consistently to the same causes and while micro causes appeal to me emotionally I give to larger groups for them to decide who needs what; give to the Red Cross and due to losing my mother to cancer and mother in law to Alzheimer's, I give to charities for those as well as to our church and local fire dept. I used to give to a wider variety but found they shopped my name and I was innundated with solicitations, so I no longer respond to requests at all. I have considered other charities but in researching several have found that they had critics on issues so I end up sticking with those I know. As for donating other items I have found that at least here in affluent Westchester County it is harder and harder to give stuff away. Furniture, clothing, toys, etc. I spent a lot of time this year trying to find people who want used items, it wasn't easy, salvation army, goodwill, battered womens shelter, home for pregnant teens, I called them all! The United Way promised to have someone call about using my furniture to help the Mamaroneck flood victims but nothing. Big Brothers finally took a lot of it. For these items, micro giving is better, Westchester.gov has a site where people can list things they have to give away and things they need, I responded to requests for items and dropped off kids clothing and toys and books and such for those who said they needed it, one person only wanted my bookcase if I dismantled it and delivered it to them (I kicked it to the curb); like everything in life, giving stuff away has become exhausting!

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Jill

I've consistently observed that friends and family in Canada and Europe donate less to charity than the Americans I know. I figure it's because people in more 'socialist' tax systems assume the government is taking care of people on their behalf while Americans prefer to do it themselves. I suppose a different reading could be that there is more need in the States because the government doesn't do its job as well. It would be interesting to add up all the social welfare expenditures and determine whether people are more generous with their own money or when the government mandates it. Sort of like comparing whether waitstaff receive higher tips when you allow people to choose their own or mandate a certain percentage.

Hesla

Once a year I travel to a 3rd world country and donate my time to do eye examinations in rural areas. I pay my own way down, as well as bring my own equipment. There is usually a non-profit inovlved that you pay a certain amount to as well, which covers your accomdation, food and travel. For instance it cost me approx. $3200 to fly round trip to Tanzania, and pay the non-profit for what i mentioned above, for a two week eye-care mission.

The benefit to this is that i see first hand if my money is going to good use. I also get the added benefit of traveling to a place i have never been and meeting the people off-resort and out of the major cities (eg. the Masai people of Eastern Africa).

My specfic skill (Optometrist) allows me to do this, however anyone can go.... Building houses in central america for instance.

Michael

People donate to help transform the world into the way that they want it to be. I target my money and my time build the institutions that are not served by the public coffers or by commercial enterprise. As a result, giving is much more about extending our worldview. We want an acknowledgement of our donation rather than recognition of our charity.

I donate to charity because I want to live in a world where people give money to worthy causes.

I donate to non-profits because I want the world to be filled with public open space (Nature Conservancy), food for the poor (Second Harvest), and public radio.

If I were king of charity, then I would have a fixed write-off for charitable deductions. Everyone should be able to deduct 20% from their charitable donations. The rich should not get a greater tax subsidy from their donations than the poor get from their donations. Those who do not itemize will get no deduction from their charitable donation.

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Paul S.

"...people want to know how much of the money they are donating is going to the cause they care about versus how much is going toward buying office chairs, fact-finding missions, and ballroom dances."

Funny that people never apply this line of logic to the non-charitable purchases they make. Because apparently Nike devotes 100% of its expenses to manufacturing and distributing shoes. Any nickel you spend on a pair of sneakers that doesn't return directly to the factory in China is suspect, and Nike doesn't "deserve" to get it.

Or perhaps employees at charities don't deserve to sit on chairs or have Christmas office parties. And of course charities shouldn't research potential new avenues for assistance, or find out facts about their beneficiaries.

Charities suffer twin crises in labor and infrastructure due to this obsession with "overhead." Some of this is (appropriately) bare economics -- charities don't have steep "profit margins" because they depend on, well, charity. But some of it is a kind of grasping miserliness on the part of many would-be donors, who seem to believe that the only people who deserve to work for charities are those who are also willing to *suffer* for their employment.

So yes, of course one should apply due diligence with regard to how one's charities disburse their dollars. But just as Nike's product would suffer if it only charged for the cost of manufacturing, so too would charities' "products."

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John M

Our family puts together money and buys farm animals for families living in third world countries. Goats, cattle, sheep, etc... can all be purchased and issued to these families. We've been doing it for a number of years now and feel that our money goes to a good cause.

Esther

The Roman government had a taxation system, so I would imagine taxes, along with tithing, were both very much present in people's minds back then.

Aps

I only give to causes personally relevant to me, involving places or people I know or care about. Everything else is too remote... I donate to my alma mater because it has personal meaning to me and I want to give people the same opportunities I had. My money only goes to places where it will make a difference, but whatever charity it is must also have some strong emotional connection in my mind. Why else would I donate my money?

Maks

I give to highly targeted causes: donating money to buy winter coats for an orphanage in Russia, sponsoring a local dog rescue group, refering people to employers, etc. The common thread is that none of the charities I deal with have any overhead or administrative expenses -- every donated penny goes to the cause. Compare that to 30% overhead rate at United Way.

discordian

1. We don't tithe but do give to the church (RC) regularly.
2. I'm an official volunteer at booksforsoldiers.com and have been sending care packages to our troops.
3. Clothes and toys got to credible charities
4. We also donate money to lymphoma and leukemia society via relatives that participate in Team in Training.
5. Misc. other donations throught the year to other charities and school fundraisers.

As to why - it just seems right. Hopefully what little we can give will be that extra little bit to save a life or reach a cure.

Jay T

I gave to http://www.childsplaycharity.org/ because I feel bad for sick kids, and because I am a fan of and have met the people that run it. I think that their reasons for the charity are sound, and I'm very confident that they are operating with as little overhead as possible.

I don't need any recognition.

I tend to be all over the place with my giving. I have a certain amount that I donate each year, and I just give to the places that happen to catch my interest.

I donated to both micro and macro charities, so it doesn't really matter to me.

Tax deductions are not that big of a reason for me to give. I don't tend to ever donate time. I guess I'm kind of selfish that way.

I don't think that there is any major thing that I see in charitable giving that stands out as a huge black mark. I know some charities are not as charitable as they could be, but I just avoid those.

Nancy

I was strongly influenced as a child when I learned about Maimonides' giving hierarchy. I also learned that the Hebrew word for "charity" is "justice." I give as much as I can, and in amounts I feel will make a difference: no $20 contributions.

I've supported Raphael House, a small residence in San Francisco that takes in homeless families (not just adults), for many years. It's a Christian organization, but I'm OK with that. I've donated my shoes to Soles for Souls, because I have a profligate shoe habit and this is my way of making amends. I give to the local SPCA. I give to Doctors Without Borders and Mercy Corps, mostly because personal acquaintances have worked with those organizations.

I also donate blood four or five times a year, every year. I'm O-positive, CMV-negative, which means my blood can be used to transfuse newborns. I have many friends who can't (because of cancer) or won't (because of squeamishness) donate blood. I do it for all of us.

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Aaron

If I were the "King of Charity," I would implement at least two "big ideas" on charity that I have already sent to my Representative and to the CEO of my Fortune 20 company.

First, I asked the Representative to create legislation that would make it the law that if you call yourself a charity or provide people with a charitable deduction, at least 80% of the funds must go directly to the purpose of the charity. This would (I would hope) eliminate a lot of low-life "charities" that give only a small portion to the needy. Further, it would force efficiency and ensure that charities are really engaged in charity, making us all feel better about giving to a charity--since, by definition, they would have to give at least 80% to the needy.

Secondly, I wrote to my CEO and told him that it would be a wonderful boon to our goodwill--and an encouragment to charitable giving--if we charged zero percent interest for credit card donations to approved charities (and by "approved" I mean ones that are efficient, above reproach, etc.).

Wouldn't it be wonderful to donate, oh, $1000 to Smile Train and not have to pay interest on it? It may not do anything particular for the bottom line of our company, but it would certainly bring goodwill...and would likely encourage additional giving--and that's a good thing, right?

As for tithing, I have done it all my working life. But for the first time, I am seeing the deeper truth. When our tithing is about buying nicer pews and brand new song books and a more elaborate lighting system--all while the world starves to death!--I know intuitively (spiritually?) that THAT is not what Jesus would do. There are too many true NEEDS in this world for us to lightly give away 10% of our income on having a nicer pulpit or sound system!

Me? I support Smile Care and Feed the Children. There's something about children that compels me. And ever since reading of Mr Levitt's lose of his child (Andrew?), I have had a deeper appreciation of how utterly precious and beyond all value our children are. I just wish I had so much more to give them....

Merry Christmas! After all, this IS the season of giving, is it not?

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Shannon Angle

Four years ago we began donating in earnest to three groups-Heifer Project, American Cancer Society and Alzheimers Foundation. As our Christmas gift to our siblings we donate in their name. My father recently passed away, after suffering from Alzheimers, my mother-in-law passed away from complications of cancer. Heifer Project provides the seed for some people to begin a sustainable existance. We are public school employees and see need on a daily basis. We support our local food bank, and a group in our area that targets local families, providing clothing, school supplies and medical/dental support. We do so without giving our names, as it is not the recognition that is important, but recognizing the need and responding.

Jason

I give monthly to United Way (to effect change locally) and on a rotating basis to national charities (for national and international change). After moving my new local, I'm just finding out about a way to donate some of my time like I did in my last location. I diversify my charity like I diversify my stock portfolio. By giving to large and small, specific and general I figure I'm hopefully making a difference in the variety of areas I want to make a difference.

bob

I also give to Heifer International, www.heifer.org, as well as CARE, www.care.org, and OxFam, www.oxfamamerica.org, to support people with the least. I like microlending but have yet to get actively involved. I love the ONE Campaign, www.one.org.

I'm really excited about the former hedge fund guys who set up www.givewell.net to analyze non-profits, discussed yesterday in the NYT and the WSJ article you linked.

I know from an insider that the Red Cross is a terrible organization to send your money. Just go look at their gleaming, expensive new HQ in D.C.

P.S. About the statement below, so what if people who make tons of money pay a lot in taxes and pay a lot of the total? They absolutely should. They obviously benefit richly from America, and in our system, they are required to support it in the form of taxes. If they don't want to pay their share of American taxes, they can renounce their citizenship and move. To be honest, it's ridiculous to even bring it up in a post on charity, in a world where so many people live on less than $1 a day.

(Although I don't want to open up a tax can of worms, click here if you think that people who make a lot of money pay too little tax, and/or here if you think they don't pay for their fair share of government services.)

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Jerry

I'm a big believer in "charity begins at home". As good as it feels to give to charities, it's important to know your own limits and ensure that your own financial house is in order first.

Earlier this year, I learned about microcredit and finally, at the end of the year, I've hit all of my own personal obligations and financial goals and decided to participate in Kiva.org.

I like being able to select the entrepreneur or investment. I also like knowing that I am able to help somebody help themselves and hopefully the long-term benefits will benefit far more people. Most importantly, there doesn't appear to be any significant overhead which means that more money goes to those who need it the most.