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.]