Are Canadians Really More Generous Than Americans?

From the SuperFreakonomics chapter on altruism: “Americans in particular are famously generous, donating about $300 billion a year to charity, more than 2 percent of the nation’s GDP.” That said, the conventional wisdom seems to hold that Americans are outclassed by our neighbors to the north. A new report by The Fraser Institute, however, challenges this wisdom: “[E]ven the most generous Canadians don’t match the level of charitable giving found in the United States. Monetary generosity in the U.S. surpassed that of Canada, with 27.3 per cent of American tax filers donating to charity, compared to 23.6 per cent of Canadian tax filers. In comparing Canadian provinces to American states on the overall index, Canadian provinces and territories occupy six of the bottom 10 rankings, with Manitoba, Canada’s highest-ranked jurisdiction, ranking 35th overall.” According to Charles Lammam, co-author of the report: “The notion that Canadians are more generous that Americans is a myth, at least when it comes to private monetary charitable giving.” Within the U.S., Utah is the most generous state, where “33.7 percent of tax filers donating 3.20 percent of the total income earned in the state.” (HT: Ricardo Bortolon) [%comments]


Diego.CMS

According to the numbers given, Americans are more generous than Canadians. The US percentages for charity are higher, so economically speaking the Americans are more charitable. The opportunity cost for both countries are really similar. But, apparently the marginal cost for one country is better than the other. One country is having more benefits through this actions taken. Americans are more generous than Canadian, if people use this date of the percentages of GDP for charity.

Thomas Ludwig

While this is an interesting point of data, is this a methodologically valid way to compare rates of charitable giving? The U.S. and Canada have different tax codes and forms, and whether or not one claims a deduction on their tax forms may or may not reflect whether or not they donated. In my personal situation I did not have enough deductions in 2009 to itemize, since I do not have mortgage interest to deduct. Thus entering my charitable contributions made no difference to my end tax bill--so I didn't enter them.

PDQ

I'm curious- In Utah, how much of that goes to the church?

MarkAndStat

See footnote 4 of the report. The gap is probably wider than reported because of the differential tax laws in the United States and Canada. The study apparently did not account for the proportion of people in the United States who itemize their taxes which a google search shows is less than 50%. The study seems to imply that households that do not itemize are assumed not have not made any charitable contributions. In addition there are likely significant differences in the patterns of charitable giving between those who itemize and those who do not.

KewZee

Does part of the taxes paid by the Canadians for things American taxes don't pay for count as charity (however involuntary)? Just saying, if my taxes paid for children's healthcare, I wouldn't feel the need to donate as much either.

mary vant hull

If one could subtract American giving to their churches &/or to Christian missionaries all around the world, would these figures still hold up? Perhaps not.

Also, question: Do Canadians have similar tax breaks for charitable giving?

PDQ

Also, FWIW, in the World Giving Index, published by the Charities Aid Foundation, the numbers are reversed - they say more Canadians (and Brits and Aussies and Kiwis and Irish...) give money to charities than Americans. They use Gallup poll data from 153 nations, which may be less objective than tax return data...but on the other hand, do all tax filers bother to report charitable contributions? (We're personally in the AMT group, so itemizing doesn't help us).

http://www.guardian.co.uk/news/datablog/2010/sep/08/charitable-giving-country

Barbara M.

We may not be more generous on an individual basis, but it is possible that we have more social supports for people than Americans. We pay higher taxes than Americans do. In Ontario, for example, a large proportion of the tax revenues goes to health care and education. Both of these are highly valued by all Canadians.

Jim S.

1. How much of either nation's charity goes to pay church people to preach church dogma to the faithful, or to proselytize the unfaithful? Does this explain Utah's number one ranking?

2. In a recent visit in a very Republican area of Florida I noted in the local paper a notice for a benefit lunch to help an uninsured cancer patient pay for her medical bills. Charity in the USA, unnecessary in Canada.

Steven at UVic

As a Canadian studying economics in British Columbia, the region that the Fraser Institute tends to focus on, I'd be hesitant to take what they say without looking for an alternative explanation.

I'm not saying Canadians are more generous, but this particular group would be more than happy to simply compare declared charitable contributions on tax returns and stop at that.

I think this may fail to take into account the fact that Canada has a much simpler income tax system than the United States, and as such I don't think most Canadians have a strong incentive to keep their receipts until tax time.

I'm not sure if that could make the difference or not.

It's also important to keep in mind that Canadians vote in the governments that donate to charities on our behalf. Because we see ourselves as generous people (whether that be true in fact or not), we seek out governments that reflect that value.

Read more...

cariqunyil

Tithing to one's church might be charity, but generosity as a ticket to heaven is not really charity in the opinion of many secularists.

Lea

It would be interesting to know, however, how much of the charitable giving is religious in nature. Although contributions to megachurches, the Latter Day Saints and the Vatican are considered considered charitable, I suspect that's not what most readers are thinking of in terms of 'generosity'... Utah is probably the most religious state, hence the high percentage of giving. Canada is more secular, yielding a lower overall percentage, but perhaps a higher value in terms of service and generosity (instead of church overhead/administration). Not to mention that the higher tax rates create a strong social safety net, so the need among the poor is nowhere near as great as in the US...

Kai

It should be pointed out that Utah is dominated by a religion that tithes 10% of the earnings of its members. And, from what I understand (could be wrong) the US tax code is more generous for charitable donations than most other countries.

Utah has the best receipt keepers.

This assumes all donators are claiming their tax deductions on their donations.

Jeff Wiebe

As a Canadian, I've never heard it claimed that we're more generous than our neighbours to the south. In fact, I'd always assumed the opposite. Beyond that, there are several gaping holes in this report (though I'd expect nothing less from the Fraser Institute, which tends to do everything it can to make Canada look bad).

First and most obviously, using charitable giving statistics as the sole predictor of "generosity" is grossly misleading. There are many other factors that contribute to a given person's perceived generosity, none of which were taken into account with this report. The narrow scope of the report would be acceptable if its authors were content to be merely relaying information on charitable giving. Instead, they decided to make bombastic claims about Americans being more generous than Canadians, because that sells well in the media (and because we Canadians love comparing ourselves to Americans). On a side note, while this report will undoubtedly make headlines across my country, most Americans will probably pay little or no attention to it, and for good reason.

The other problem with the narrow scope of this report is that it doesn't attempt to explore any of the reasoning behind the numbers - our tax structure is much different (charitable giving incentives), and our non-profit organizations typically receive much more government funding than their counterparts in the U.S., meaning they rely less on support from individuals.

A much more interesting report would have involved discovering whether Americans and Canadians have different perceptions of how important their individual contributions are to the continuance of non-profit organizations, coupled with a look at differences in non-profit advertising methods and frequencies on both sides of the border, and how these would affect giving behaviour.

Read more...

Ruppert

Germans who are church members pay a firm percentage (in my case 9%) of their income tax as "Kirchensteuer" (church tax), which is unknown in America. So the situation in various countries is quite different.

Swashbuckler

"I'm curious- In Utah, how much of that goes to the church?"

Exactly. If you take out giving to religious institutions I bet Americans are about the same as Canadians and citizens of other industrialized nations.

adora

It is harder to claim tax rebate in Canada. In US, they would even give you a tax form at Good Will by dropping off used clothes. From what I see, both countries are about the same.

I think Canadians are more proud of volunteering. I've heard that 1 in 4 Canadians volunteer regularly. This pride annoys me because I think it put unskilled workers out of work, such as those who clean up garbage by the highway.

Eric M. Jones

We live in such a partisan world that it almost goes without saying that the Fraser Institute has an Agenda. It is a hard right Conservative group that loves the US Republican party. They believe in "personal responsibility and less government intervention." Hah!

So the only question here is trying to guess where they twisted the stats to get the result they want...and why.

Canadians are just like Americans, only nice ...except for these guys. Oligarchs are the same all over.

PS The highest rate of church tithing and porn site subscriptions in in Utah.

--It's hard to stay cynical enough to keep up with reality.

Kevin

The serious flaw in the Fraser Institute's report is that it looks at tax filers for this year.
In Canada, I can let my charitable donations pile up for up to 5 years in order to get the biggest bang for my buck as a tax rebate.