Why are poor people more generous than the rich?


Yesterday, I wrote about a report put out by The Chronicle of Philanthropy disaggregating the amount of charitable giving according to various criteria. In its discussion of the report, NPR said that poor people tended to give a larger proportion of their income to charity, and tried to explain why this might be so.

Paul Piff, a social psychologist at the University of California, Berkeley, says that’s consistent with what he’s found in years of research on income and giving.

“The more wealth you have, the more focused on your own self and your own needs you become, and the less attuned to the needs of other people you also become,” he says.

Piff says it’s not that rich people aren’t generous. They’re often just isolated. They don’t see a lot of poor people in their daily lives.

The charitable giving report does provide some support for that idea. As the NPR report says, “rich people are more generous when they live among those who aren’t so rich.”

I think another factor may be that people who are very wealthy tend to be immune from fears of impoverishment and thus more easily think that they deserved their wealth because they are clever and industrious. The corollary to that belief is that the poor are so because they are incompetent or even unworthy and thus do not deserve any assistance since they will only squander it due to their weak character and poor habits. They are the ‘undeserving poor’ as Alfred Doolittle put so well in My Fair Lady.

People in the middle and lower incomes, on the other hand, are well aware of the precariousness of their current well-being and the amount that luck plays in their lives. While they may be doing satisfactorily at the moment, they know that losing a job or getting ill could easily send them into the poor house. Thus they are less likely to see themselves as better than the poor or the destitute.

I really have no empirical evidence to support this belief of mine. I acquired it very early in life, around the age of 12 or so. My mother was a die-hard do-gooder, always collecting money for various charitable causes and she would rope me into those efforts from the time I was a little boy. In Sri Lanka a popular form of fund-raising for charity was something called a flag day designated for a specific charity. Volunteers would be given a sealed tin can with a slot pierced into the lid and fan out into the streets to ask people to drop money into the can and in return get a small flag that they could pin to their clothes to show that they had contributed.

So I, sometimes accompanied by a friend if I could collar one, would walk along the streets stopping people as I went along and also knocking on the doors of homes that I passed. I quickly noticed a pattern: that poor people would hardly ever turn me down and they would give even a little with a smile. Some richer people would give generously but surprisingly often they would ignore me or say they had no change or that they were in a hurry and would give later. (In Sri Lanka it is very easy to tell the economic and social class of people by the way they look and dress.) As a result I much preferred to approach poor people to ask for money.

People who live paycheck to paycheck know that it would take very little for them to end up at the receiving end of charity, rather than the giving end, and thus tend to be generous. But it is easy to lose that sensibility when one becomes very wealthy and think that one did it on one’s own. See this short clip in which actor Craig T. Nelson rails against the welfare state, praises the ruthlessness of the capitalist system, and then tells Glenn Beck how he used to be really poor but became successful all on his own. Notice the total lack of self-awareness when he says, “I’ve been on food stamps and welfare. Anybody help me out? No.”

This lack of awareness of how others have helped them achieve success is unfortunately all too common among the wealthy.

Comments

  1. piegasm says

    Yeah Craig, those food stamps and welfare checks, that was totally all you. Wow, oblivious much?

  2. says

    Government money comes from a magical tree and they are beholden to no man for accepting it, as it is their due. Unless it’s going to the wrong sort of person, in which case it’s suddenly taxpayer money that is still inextricably theirs and they should be the sole arbiters of its distribution.

  3. Onamission5 says

    A purely anecdotal story about lower income philanthropy:

    My kids and I had the experience when collecting funds for tsunami victims of a woman from a lower income apartment building literally chasing us down the street in her server’s uniform to eagerly give us five bucks. We tried not to take it because my kids were selling their drawings for just a quarter each, but she was determined to give us that money so we relented. The people from the big, really chi-chi houses in our neighborhood weren’t so insistantly generous. My kids collected a total of just over $50, and most of it came from people in or near our income bracket. Students, working families, the elderly. Very little came from our neighbors who looked like they had it to spare.

    That was likewise my experience when I worked for Greenpeace as a canvasser way back when. The wealthier neighborhoods were the hardest sell, while the middle to lower-middle income neighborhoods held the lion’s share of memberships.

  4. ImaginesABeach says

    The report almost certainly undercounts the support poor people give to charity. The study reports only those with incomes of $50,000 or more. And because it looks only at donations reported to the IRS, it almost certainly does not include donations given at the fundraiser down at the VFW for Mr. Jones who was hurt in an accident. And it absolutely does not include the donations made by dropping a bag of food in the donation box at the grocery store, or the money handed to a neighbor who is having a hard time making ends meet this month.

  5. Onamission5 says

    As someone who grew up poor and has spent most of my adult life in the same hand-to-mouth boat, I agree with this. The charity of the impoverished and of the working poor tends to be more along the lines of free emergency babysitting for friends and neighbors, inviting neighbor kids over for meals, taking collections to help a person in your building get their lights back on, bringing your extra veggies over to a neighbor whose spouse just left them, sharing hand-me-down clothing, and other sorts of grass roots, community focused things. Whereas, charity for more liquid individuals tends to be more along the lines of cash donations to non-profit groups and thus more visible.

    The college student who insisted she buy my milk for me when I’d failed to account for sales tax and was going to put it back, she gets a permanant thank you in my mental notebook. It was a tiny thing for her. It was huge for me. All those little acts of kindness may not be tax deductible but they sure do add up.

  6. says

    The demographics of the report were problematic but using IRS data, that is Schedule A for itemized deductions is a difficult data source for people with lower incomes as they’re less likely to itemize.

    But what’s really bad about the data and analysis is the whole definition of charity. About 75% of the money was contributions to churches (apparently the study could isolate this data). I think that really skews things. But also most contributions to education are also Schedule A deductible so how much are the rich just contributing to a new building at the alma mater.

    So the study doesn’t actually tell us much about “charity”. Churches and colleges can do whatever they want with their contributions and neither are obligated to report what they do with it. Many stories have been published about guesses of where church contribution money goes (for instance, 4B$ of mormon money into real estate).

    And the study’s conclusions that red states give more doesn’t hold up at all once the religious contributions are subtracted (in fact, the blue states are slightly more, but the difference doesn’t seem to be statistically significant). And the cost of living adjustment they did, because “giving” is cost-adjusted fraction of income is fairly suspect also.

    And how did they even get IRS data (isn’t IRS itself banned from releasing the data?) so all the data must have been voluntarily submitted which probably means some form a sample bias.

    So I doubt whether any conclusions can really be reached from this study.

  7. MikeN says

    My totally anecdotal experience working as a furniture mover in college: the poor family with the cheap light fibreboard furniture would tip, often generously.

    The well-off guys with the mahogany sideboards and oak cabinets: bupkis.

  8. smrnda says

    I think a reason why rich people don’t give more is that they are living in areas that are segregated to only include wealthy people.

    When I lived in a college town, you had pretty affluent people and pretty poor people all within a town of about 100,000. People volunteered their time and gave their money a lot because it wasn’t so hard to do, and because the need was fairly visible. The town was so small you couldn’t help notice that yes, poor people live here to.

    Living in Chicago, I noticed this was much less common behavior since people are largely segregated by income (among other factors.) A privileged person is going to live a long way from any poor people, and will probably not take part in any sort of community activity that isn’t exclusive to their own social class. While I was living in Chicago I would have wanted to do something, but given where I worked and lived, it wasn’t feasible.

  9. John Landers says

    So I’ve got a wife and a kid; we’re a single income family and we’re definitely in the middle income bracket.

    Because of our circumstances – debt, monthly expenses, trying to save something for our kid, and trying to do something fun – we rarely have money to give to others. In the last couple years, the only money that I can recall donating was to NPR, This American Life, and through retail stores (grocery stores and the like) that take a few bucks to help animals, grow a tree, or provide food for thanksgiving.

    Most of our donations go in other forms. Food collection drives and donations to Goodwill and the Restore, for example. I never claim these on my taxes because my personal belief is that I shouldn’t need a tax incentive to give where I can. If I ever get the debt monkey off my back, I’ll probably consider donating more money to organizations that I care about and I think are doing a good public service… but that’s not likely any time soon especially if I want to pay for the kid’s college when he gets there.

    I say all of this to provide further support to what others are saying here. I relay my $.02 just to provide some further support that the study, by using IRS data, is going to be highly inaccurate and should be taken lightly.

    Also, didn’t the report focus on charitable giving as a percentage of disposable income? I ask because if your disposable income only amounts to a $100 and you give $10 to charity, that’s 10%. Just another reason why we should take the report lightly. While I will continue to believe, based on passive observation, that lower classes are more charitable – I don’t think this report really does anything to reinforce that belief.

  10. Anonymouse says

    The greatest gift my parents (inadvertently) gave me was when they reneged on their promise to pay half my college costs in payment for my being their house-slave throughout my high school years. They were upper-middle class and could easily have afforded $400 a semester (in the 1980s in my state, fulltime tuition at my uni was only $800/semester). By forcing me into the multiple minimum-wage jobs and all-ramen diet, they taught me how to understand just how close to the bone many people live. I’ve tried to remember this lesson since and its affected the charities I’ve chosen to support.

  11. Mano Singham says

    It is my firm belief that everyone would benefit from being poor for a short while. A whole different world opens up for you.

  12. Stephanie Bolivar says

    I think it’s wrong that the wealthy sometimes flaunt their giving, as they seem to flaunt everything else. Why do we or should we give? Because when we see someone in need, that’s what we should do. We are all given gifts. I, for example, was given the gift of teaching . I don’t have a lot of money, but I teach my kids and the children of others the importance of giving what we have. When my students need money or a snack, I give it to them. I often feed neighbor kids and family members. Other people have more time than I do (I have four children), so giving of their time is their gift. Those who were given money…this is their gift to give. The money, like other gifts, is not meant to be amassed and hoarded. It’s meant to be shared.

  13. tigger says

    The real answer is that once you have swam out passed the breakers, you dont ever want to look back. While you are struggling, its easy to see the others around you struggling. There is more empathy. But once you hit that calm water, the LAST thing you want to do is throw a line back towards the breakers. Its a very interesting phenomenon.

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