Thursday, March 11, 2010

Americans give because it feels good

There's a bunch of hogwash going around implying that Americans only give to charities for the tax breaks. Do you know how you get a tax break by giving to a charity? You have to itemize your tax return and include the donation!

About 35% of Americans itemize their tax returns! If we apply that to giving, it means that only 35% of Americans who donate money to Red Cross (remember the phone text thing? did you save that record for your taxes?) or who donate clothes to Good Will or who drop $.75 in the Salvation Army bucket are actually getting the tax break on that donation.

Americans are innately giving people. We are overall optimistic and want to help our fellow man. Just check any cash register at a 7-11 and you'll find the "give a penny, take a penny" dish! We have, as citizens and by choice, given more to disaster relief efforts than any other nation.

If you are someone who itemizes their taxes, do you really just give away money to offset your tax obligation? Think of it this way... if you give $100 to a charitable organization, you get 35% tax deduction on the amount given. So, you give $100 and you get $35 off your tax liability, you are still out of pocket $65. It would make no sense in the world to donate $100 for a $35 break if you didn't WANT TO GIVE or SUPPORT the organization.

So the idea that the rich only give because of tax breaks is a silly argument. All of us give because it feels good - we give because we want to! The more money we have, the more we give. It's not about tax breaks, it's about abundance - those who have more typically give more.

There is currently a government revolution to take over the basic responsibilities of American citizens. Our government thinks that they know what's best for us and they're trying their darndest to write it into law.

Are you one of those noble Americans who have given to, say, Hospice or the American Cancer Society? We've given to these organizations because they provide a benefit that we can only find in the private, non-profit sector. The moment that our government takes over these sectors, there will be no incentive for Americans to give money to them. The more the government controls, the less we will feel obliged to donate to the cause.

When's the last time you donated to the Post Office? What about Medicare? I can personally say NEVER! We don't donate to these causes; instead, we lobby for higher taxes to cover costs. We don't require them to run efficiently because we have a "never ending pool of rich people" who can keep these failing government bureaucracies afloat.

Take a look at charitable giving in the United States versus the United Kingdom. 2.2% of our Gross Domestic Product is charitable giving (about $250 billion). In the UK, it's 1.1% (about $14 billion or $83 billion adjusted for population). What's the major difference between our two countries? I'll give you a hint, as written in American Mega-Giving: A Comparison to Global Disaster Relief:


...Americans, more than any other people in the world, maintain control over how their monies are used by donating it themselves rather than delegating this responsibility to the federal government. Every year, one can expect Americans to give gifts large and small to support the constant needs of everyday life and to respond to crisis as well.


However, philanthropy in America is not simply a function of our wealth. Rather, our wealth is a function of the basic American principles of individual freedom, moral responsibility, and decentralization that also guide our philanthropy. The American belief is that the collective outcome of individual choice is superior to that of a more systematic centralized and governmental approach. While individuals do make mistakes, the flexibility and freedom of the American system encourages a level of entrepreneurship and personal imperative unmatched by any other nation. The very same freedoms and institutions that allow Americans to maintain control over their giving are also the basis of American success and philanthropy.


If for no other reason, consider the great government takeover from a philanthropic standpoint. Americans will take care of each other, Americans will give and Americans will better themselves just so long as we have the freedom to do so.


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