How the Rich Justify Donating Less to Charity than the Poor

how the rich justify donating less to charity

To be honest, as a self-described rich person, I can be a bit of a rich person apologist. But I have always been puzzled as to why the rich give less as a percentage of their wealth to charity. Some people surmise it’s because the wealthy are insulated from socioeconomic suffering or because the rich are unethical.

I had previously surmised the reason was that giving is a skill. If you don’t develop the skill when you have less, it doesn’t come naturally when you have more. So my solution was – build the habit.

How the Rich Can Justify Giving Less

A new idea popped into my head after discussing the differences between absolute and relative frugality. The rich may treat charity in terms of absolute and relative generosity.

For instance, the rich give on average 1% of their income as opposed to 3% by the poor (I don’t know if this is pre- or post-tax). So 3% at a $33,000 post-tax salary might be $1,000. 1% at a $600,000 salary would be $6,000.

The poor don’t give a lot in absolute terms to charity.  They do give a percentage that is significant for them. While the rich can give a lower percentage, they can give themselves kudos because of the amount.  $6,000 seems like/is a lot of money and the rich might stop at that amount because it’s such a large amount. Both sides can pat themselves on the back by choosing to view their donations in the way that is most beneficial to them.

In a way it makes sense. The poor can’t give much in terms of absolute amounts without doing serious damage to their finances. The rich don’t have to give a large percentage in order to make an impressive gift.

And the absolute amount certainly matters. The media have chastised Jeff Bezos  for his lack of philanthropy but he, his parents and Amazon have given away hundreds of millions.  Further, to be fair, if you have a lot of money to give, it would be wise to take your time and research before making any moves.

Are the rich terrible?

I’m not trying to shame anyone regarding their charitable giving. I applaud anyone who gives to charity in any amount (so long as it isn’t to the church of scientology etc). Decide on a charitable budget that makes you comfortable and then view your choice in whatever way that makes you feel good about it. It’s a great deed – it doesn’t have to be the greatest deed to be commendable.

Does viewing your charitable donations in terms of relative or absolute generosity help you feel better about your donations?

3 thoughts on “How the Rich Justify Donating Less to Charity than the Poor

  1. Hi Lisa, your posts always make me think and challenge myself..

    My truthful answer: There are a lot of “charities” that I don’t believe are worthwhile causes, especially religious and political organisations. And, possibly a bit right wing for you, but I do believe lots of charities over pay staff for a very cushy job, at the middle and senior management level.

    1. Interesting point. I think I will write a follow-up to discuss what counts as charity in my mind.

      I also think it’s different in the U.S. as opposed to other countries where charity is not built into the taxation system.

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