Why the rich give proportionally less and what to do about it

by guest blogger George Crankovic

Charityforall

When the likes of Warren Buffet or Bill Gates cuts a check to charity in the hundreds of millions of dollars, it attracts media attention and admiration all around.

High rollers like these can do lots of good in one stroke of the pen. Maybe that’s why many people assume charitable giving is largely a story of those who have done very well doing good.

But according to a new book on charities and giving by Ken Stern, With Charity for All: Why Charities Are Failing and a Better Way to Give, the people who can least afford it are the ones who give.

The top 20% of earners give about 1.3% of their income to charity. But the lowest 20% of earners give almost three times more — 3.2% of their income. That’s a huge gulf.

Working stiffs are giving till it hurts. And they’re giving even without the benefit of tax deductions because most can’t itemize.

What’s more, the rich tend to give to colleges and universities, the arts, and museums. In 2012, not one of the top 50 gifts went to social services. Ordinary folks, on the other hand, give to social service charities and churches.

But here’s the really interesting part. One study showed differences in giving even among the wealthy. Rich people living in more homogenous neighborhoods gave less than rich people living in somewhat more racially and economically diverse areas.

So what conclusions are drawn from all this — and how can we apply it to fundraising?

First, the wealthy tend to put their own interests above those of others. That’s just the way it is. So if you’re approaching a person of means in a face-to-face major gifts setting or through a communications channel, you must demonstrate what’s in it for them. Think donor benefits. That’s what you should always do in fundraising, but in the case of wealthy donors, it’s even more so.

Second, the wealthy are less exposed to poverty, economic injustices, social barriers, and other challenges, so they may be less able to empathize with these problems. That’s why, instead of dialing back the need in an appeal in the belief that it will be more palatable to wealthy donors, you should show the raw reality and do it boldly. Especially for big donors, it’s sympathy, empathy, generosity, in that order.


Comments

2 responses to “Why the rich give proportionally less and what to do about it”

  1. Nonrich donors also don’t demand press releases!

  2. Nonrich donors also don’t demand press releases!

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.

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