Faith, Hope, and Charity
Who gives to whom, and why.
Jan 22, 2007, Vol. 12, No. 18 • By MARTIN MORSE WOOSTER
Another interesting point of Brooks's research concerns support for government income redistribution with charitable giving. A 2004 survey conducted by Syracuse University, for example, found that if you took two people who were identical in age, income, education, gender, religion, race, and political views, but whose only disagreement was that one person thought it was the government's job to redistribute income from the rich to the poor while the other thought that income redistribution was none of the state's business, the person who opposed government income redistribution was likely to contribute $267 more to charity each year than the income redistribution advocate.
"In other words," Brooks writes, "people in favor of forced income redistribution are privately less charitable than those who oppose it, regardless of how much money they earn."
Economists, of course, have long known that if the state expands, the private sector shrinks. (They call this process the "public goods crowding-out effect.") Brooks cites an interesting but neglected paper published by the National Bureau of Economic Research in 2005 in which economists Jonathan Gruber and Daniel M. Hungerman explored this "crowding-out effect" on charities during the New Deal. They found that while the welfare state between 1933 and 1939 expanded from zero to four percent of the gross domestic product, religious charities shrunk by 30 percent during the same period.
Brooks finds a similar crowding-out process taking place today. Under today's welfare laws, states set the payments under Temporary Assistance for Needy Families (TANF), the principal government welfare program. Tennessee's TANF payments are 61 percent lower than New Hampshire's, but Tennesseans give, on average, 4.3 percent of their incomes, well above the 1.8 percent in New Hampshire. Brooks calculates that if Tennessee raised its welfare payments to New Hampshire's level, charitable giving in Tennessee would fall by 42 percent.
Once Brooks has demolished the notion that conservatives are wealth-hoarding misers who hate poor people, he gets on to the second purpose of his book--getting everyone to give more. One way to do that, he argues, is for the left to quit picking on rich people who make big donations. For example, in 2004, the billionaire mayor of New York, Michael Bloomberg, cut government funding to 800 nonprofits in that city, and supplanted the government funds with $140 million in donations from his personal fortune.
The New York Times, of course, thought that Bloomberg gave for cynical reasons. "Mr. Bloomberg's personal wealth has made him a modern-day Medici," wrote Times reporters Sam Roberts and Jim Rutenberg, "a role that, some critics say, can also stifle dissent from institutions that have quietly absorbed city budget cuts because they worry that what the mayor gives he can also stop giving."
But wouldn't it be more productive for reporters to honor Mayor Bloomberg for his generosity--and write more positive stories about large donors, particularly those who use their wealth to fund innovative ways to help the poor and struggling?
Of course, you don't have to be named Gates, Buffett, or Bloomberg to give. Brooks shows the unsung heroes of philanthropy are the janitors and clerks who tithe to their church or volunteer at their schools or local homeless shelters. The really rich, Brooks shows, give proportionately more of their incomes, but the working poor are also surprisingly generous givers.
Here government can provide some help. Allowing everyone to deduct charitable donations from their income taxes (instead of the current practice of only allowing those who itemize to deduct) would do a great deal of good.
Some deregulation would also help. For example, suppose you live in New Jersey and want to coach your son's Little League team. The New Jersey Office of Recreation mandates that every volunteer attend a three-hour orientation session "that addresses the perspective of the specific population(s) involved (for example, young, senior, novice, and skilled athletes)." New Jersey law requires that any organization providing such a training program "shall issue a certificate of participation to each participant" who completes the course.
It's perfectably understandable that many potential volunteers might well find other things to do when faced with this state-mandated training session. But Brooks uses the anecdote to show how well-meaning bureaucrats issue regulations that discourage voluntarism.
"It seems ridiculously obvious that the government should not suppress charity through bureaucratic rules and procedures," Brooks writes. "Yet this occurs with depressing regularity."
This is a thoughtful look at why Americans give and what can be done to encourage giving. Anyone interested in American charities will learn a great deal from Arthur C. Brooks's important book.
Martin Morse Wooster, a senior fellow at the Capital Research Center and contributing editor to Philanthropy, is most recently the author of Great Philanthropic Mistakes.