Giving to charity is difficult.
For some people, it’s even worse than an impulse purchase. You don’t really get anything out of it. Sometimes you don’t have any guarantee that your money is going where you want it to (although non-profits like GiveWell and Charity Navigator are trying to make it easier). Worse, if you’re an older person who has built up an impressive net worth, you’re sick of seeing innocent kids like me, who have yet to watch the government tax, then waste, 40%+ of their income, talk about how easy it is to be a little more generous.
Interestingly enough, you’ll see in this post that there’s a growing class divide among donors. On the one hand, the poor give proportionally more of their income to charity — by a factor of 2.5, no less, despite the fact that they usually don’t itemize their tax deductions; on the other, the wealthy still dominate charitable giving, contributing between 70-80% of all donations, in terms of the bottom line. The poor tend to give to services that help the poor (direct human services, religious organizations, etc) and the wealthy tend to give to services that benefit the wealthy (universities, art museums and organizations, etc). That’s not to say that there isn’t a lot of crossover when it comes to donations benefiting people of all classes, but those are the patterns that emerge.
It would be easy to trash the wealthy and say that they should be donating more to charity, especially if they’re constantly trying to dodge taxes through any means possible, but it might also be counterproductive for the common good. Still, it would be silly to say that they couldn’t improve; however, the same goes for lower-income earners. While higher classes could donate more, lower classes could earn more. Hence the title of my site.
High-income earners are creating value for America through business and higher tax rates. Lower-income earners, even though they’re technically the most empathetic, can probably step up their game when it comes to making more money (this applies to me, as well; except I’m still a student).
I do believe, however, that in one of — if not the — most politically divisive period(s) in recent American history, generosity remains one of America’s strongest values.
You don’t need to donate abroad. You don’t have to be religious (I’m an atheist). You can pick literally anything that you think will benefit others. Homeless veterans, Syrian refugees, your local school system, whatever you want — it’s almost impossible to argue against. More than that, despite the fact that one in three Americans lack faith in how their charitable contributions are being spent, they still trust charities more than the American government (47% for charities versus 32% for government). So why not give more to charity? Especially since — unlike the government, which can be deemed inefficient at best — those charities will actually thank you for your contribution?
How Much Should You Give to Charity — If You Want to Be Considered “Average”?
Calculating how much money you should give to charity in order to be considered “mildly generous” is actually pretty simple, if you’re someone who itemizes deductions on his/her tax return. This chart, of course, should be considered the bare minimum:
(According to The Motley Fool, this data is from the “IRS’s 2014 Statistics of Income (SOI), the latest tax year for which full, finalized data is available” as of November 26th, 2016. I could dig up 2015’s SOI, but those stats are probably even less indicative of the “average” since 2015 was the most charitable year in American history.)
Keep in mind that these statistics are only for itemizers. The real amounts are probably a little bit higher (especially for those in the <$25k AGI). If you don’t itemize your tax deductions, though, net income is the same thing as AGI. So, for simplicity’s sake, just multiply your income by whatever “% of AGI” applies to your income bracket.
Again, if you want to shoot for average, this isn’t a bad place to start.
I’ll be writing a post in the next week or so that talks about the best way to donate money to maximize your happiness, too. Giving doesn’t just benefit the receiver.
I’m technically on vacation this week (and for the foreseeable future until I can find a job in Dana Point), so I have no income. I’m going to stop reporting on my income, too. Readers will know what it is based off of my 10%. At minimum. If someone wants to call me out, then I’ll provide.
“The purpose of the Navy-Marine Corps Relief Society is to provide emergency financial assistance to active duty and retired Navy and Marine Corps personnel and their families. NMCRS provides assistance with basic living expenses such as food, rent, utilities, assistance with emergency transportation, funerals, medical and dental bills, essential car repair, pay problems, and other emergency needs. Assistance is provided with loans or grants, depending on financial need.”