5/15/14 — U.S. Tops Charitable Giving Rankings Despite Rich-Poor Divide

The Street
By Laura Kiesel

When it comes to being charitable, some countries’ citizens are much more generous than others, and views on inequality are a pretty dependable indicator of how generous.

A study published online in the Journal of Consumer Research in March found that people who live in countries that promote equality are more likely to donate money.

“I’ve done a lot of research on charitable donations … but my colleague (study co-author Yinglong Zhang) didn’t readily agree that what I thought would occur in the U.S. would be the same in China, so we thought there may be differences across culture,” says Karen Page Winterich, an assistant professor of marketing at Penn State University and co-author of the study.

Even though 28% of the world’s population donates money and more than 18% volunteers their time, charitable behavior varies widely across countries. For instance, only 10% of people in China and Russia donate money, compared with 60% of citizens in Australia and Canada. In India, only 10% of the population volunteers their time, while in the U.S. that figure is 40%.

But Winterich and Zhang weren’t interested only in statistical trends in giving, but in the underlying motivations behind donating or volunteering.

To do this, they took statistical trends in charitable giving by nation and compared them with existing surveys and research on cultures that gauged people’s “power distance belief” — that is, the levels in which people expect or accept inequality. They also conducted their own survey of citizens in the U.S. and India to assess how much time or money participants devoted to charity and under what circumstances.

“Given the extent to which equality is associated with charitable behavior, we thought it might play a role,” Winterich says. “Sure enough, it did.” 

People living in countries where inequality was generally accepted and even expected tended not to be very charitable. What surprised Winterich was that this wasn’t due so much to those people believing their contributions or actions wouldn’t make a difference, but because they didn’t feel it was their responsibility to help others.

So how obligated do U.S. citizens feel to helping out others?

The United States actually fares extremely well when it comes to charitable giving, ranking No. 1 last year in the World Giving Index (up from No. 5 in 2012). This may be surprising, considering that income inequality has risen exponentially in the nation since the 1970s, with the Pew Research Center reporting at the end of last year it had hit its highest level since 1928. In fact, a 2013 OECD report found that the U.S. has the highest income inequality in the developed world, and a report out of Princeton in April revealed that when comparing U.S. policies to opinion polls, the nation tends to function more as an oligarchy than a democracy.

Yet Winterich believes it is not so much actual equality in a nation that dictates its charitable nature, but the perceptions of equality among its citizens.

“It’s not the actual difference in power or wealth that matters in this case, it’s simply the acceptance or expectation of equality,” Winterich says. “There are vast differences in income and wealth in the U.S., but the key is that the majority of people in the U.S. don’t tend to believe that inequality should exist. They believe it’s important to try to increase equality.”

This may explain why, according to a study in the Chronicle of Philanthropy in 2012, middle-class Americans donate a larger share of their discretionary income to charities than the wealthy. Households that earn $50,000 to $75,000 give an average of 7.6 % of their discretionary income to charity, compared with 4.2% for people who make more than $100,000. And according to some studies, low-income earners actually donate the highest percentage of any demographic, with a Social Capital Community Benchmark Survey saying that people at the lower end of the income scale donate nearly 30% more of their income than others.

“Basically, those with the lowest income probably feel greater responsibility to aid others, in addition to feeling greater empathy for those in need since they themselves have likely experienced it, which increases the percentage of income donated,” Winterich says.

Ultimately, Winterich and Zhang’s survey indicated that regardless of power distance beliefs in a given culture, people were still willing to donate in certain situations — namely, to help people suffering due to something beyond their control, such as natural disaster, or in those instances when the people in need are someone with whom they have a relationship.

“It’s not always the case that individuals in societies with inequality are less charitable,” the study concludes. “Rather, there are some conditions in which people feel less responsibility to offer aid due to the acceptance of inequality and are therefore less likely to engage in charitable behavior.”