Charitable Giving to the Poor at a Record Low in the United States

On November 14th, 2005, the New York Times ran a piece that described how charitable giving to human service groups (i.e. organizations that most directly help the poor) was at a record low in the United States. Here are a few interesting excerpts from the article:

Last year, the share of giving going to organizations most directly related to helping the poor hit a record low, accounting for less than 10 percent of the $248 billion donated by Americans and their philanthropic institutions.

So what is charity today if it is not aimed primarily at the have-nots? Has its definition been stretched so broadly that it no longer has meaning? If so, are the tax breaks that propel our philanthropy justified? Representative Bill Thomas, Republican of California, the chairman of the powerful House Ways and Means Committee, has raised those questions in a series of hearings examining whether tax exemption is justified for certain types of nonprofits.
The question, in his words, is, "What is the taxpayer getting in return for the tens of billions of dollars per year in tax subsidy" offered to donors through tax write-offs or to nonprofits through their tax exemptions? According to the Treasury Department, the charitable deduction will amount this year to a $40 billion tax subsidy, mostly to upper-income households - overshadowing the roughly $20 billion the human services sector is likely to raise. No official estimates exist for the cost of the tax exemption covering money that nonprofits spend and for the property they own.

The article also dealt with a misconception that many have about social services provided by Churches in the United States (i.e. that most Churches spend considerable resources in helping the downtrodden), as it stated:

Research by Mark Chaves, a sociology professor at the University of Arizona who was principal investigator of the 1998 National Congregations Study, the first comprehensive study of churches and their spending, showed that less than 3 percent of the average congregation's total budget was spent on social services.

Click here to access the full article.

-- JB