The variability of individual charitable giving in the US

Abstract

Using five-year panel data, this study examines the various dimensions of the variability of individual charitable contributions at all income levels: the variation in the generosity of individuals and the variability of the individuals' giving over a five-year period. The study finds considerable variability of both kinds. One finding is that the variability of generosity is substantially greater at the higher income levels. Another finding is that variability is substantially less pronounced by observing a five-year period of an individual's generosity than by observing annual behaviour. One consequence is that a relatively small proportion of donors account for a large proportion of total giving. The popular reputation of the wealthy for generosity is actually due to the exceptional generosity of a minority rather than widespread generosity among the wealthy. Differences in generosity and variability of giving over time are both more pronounced among high-income donors. Results of the study have implications for research on charitable giving, for predicting the effects of tax policy changes on giving, and for fund-raising.

Generosity and Philanthropy: A Literature Review

“…The typical finding on the relationship between age and philanthropy in the literature is that it is positive (Alpizar et al 2007;Apinunmahakul & Devlin 2004;Auten et al 1992;Auten & Rudney 1990;Banks & Tanner 1999;Bekkers 2003;2006b;Bekkers & Schuyt 2005;Belfield & Beney 2000;Boskin & Feldstein 1977;Bristol 1990;Brooks 2002;Brown & Lankford 1992;Bryant et al 2003;Carman 2006;Carroll et al 2006;Chang 2005a;Choe & Jeong 1993;Chua & Wong 1999;Clotfelter 1980;Duquette 1999;Eaton 2001;Eckel & Grossman 2003;Eckel et al 2005;Eschholz & Van Slyke 2002;Farmer & Fedor 2001;Feenberg 1987;Feldstein & Taylor 1976;Frey & Meier 2004a;Frey & Meier 2005;Greenwood 1993;Hoge & Yang 1994;Houston 2006;Jones & Posnett 1991a;1991b;Kingma 1989;Lankford & Wyckoff 1991;List 2004 Some studies find that the age relationship decreasing at higher age (Auten et al 1992;Belfield & B...…”

“…Obviously, higher income households donate higher amounts than lower income households (Abrams & Schmitz 1978;1984;Andreoni 1988;Andreoni & Miller 2002;Apinunmahakul & Devlin 2004;Auten et al 1992;Auten & Rudney 1990;Banks & Tanner 1999;Barrett 1991;Bekkers 2003;2006b;2007b;Bekkers & Schuyt 2005;Belfield & Beney 2000;Bielefeld et al 2005;Brooks 2002;Brooks 2005;Brown & Lankford 1992;Carman 2006;Chang 2005a;Choe & Jeong 1993;Chua & Wong 1999;Clotfelter 1980;Daneshvary & Luksetich 1997;Eaton 2001;Farmer & Fedor 2001;Feenberg 1987;Feldstein 1975a;1975b;Feldstein & Clotfelter 1976;Feldstein & Taylor 1976;Glenday et al 1986;Greenwood 1993;Gruber 2004;Havens et al 2007;Hood et al 1977;Houston 2006;Hrung 2004;James & Sharpe 2007;Jones & Posnett 1991a;1991b;Kingma 1989;…”

“…Marriage is mostly found to be positively related to giving (Andreoni & Scholz 1998;Auten et al 1992;Auten & Rudney 1990;Barrett 1991;Brooks 2005;Brown & Ferris 2007;Chang 2005a;Choe & Jeong 1993;Duquette 1999;Eaton 2001;Eschholz & Van Slyke 2002;Feenberg 1987;Feldman 2007;Feldstein & Taylor 1976;Frey & Meier 2004a;Hrung 2004;Jencks 1987;Lankford & Wyckoff 1991;Long 2000;Matsunaga 2006;O"Neill et al 1996;Pitts & Skelly 1984;Randoph 1995;Reed & Selbee 2002;Regnerus et al 1998;Rooney et al 2005;Rooney et al 2001;Slemrod 1989;Tiehen 2001;Van Slyke & Brooks 2005;Wilhelm et al 2006;Wu et al 2004). However, a sizeable number of other studies find no relationship of marital status with giving (Apinunmahakul & Devlin 2004;Bielefeld et al 2005;Brooks 2002;Bryant et al 2003;Carroll et al 2006;Clotfelter 1980;Hodgkinson & Weitzman 1996;Houston 2006;Jones & Posnett 1991a;…”

“…The number of children in a household is positively related to philanthropy in most studies that include this variable (Auten et al 1992;Auten & Rudney 1990;Banks & Tanner 1999;Carroll et al 2006;Choe & Jeong 1993;Daneshvary & Luksetich 1997;Greenwood 1993;Hoge & Yang 1994;Jencks 1987;Lankford & Wyckoff 1991;Long 2000;Matsunaga 2006;O"Neill et al 1996;Tiehen 2001;Yamauchi & Yokoyama 2005). Studies of donations in the U.K. and Ireland find a positive relationship between the number of children and the likelihood of making donations but not with the amount donated (Carroll et al 2006;Pharoah & Tanner 1997).…”

Charitable Donations: Feeling Good but Hardly Worth It

“…Other researchers (e.g. Auten & Rudney (1990)) have attempted to use average income levels for 2-5 years to figure out the level of permanent income. They concluded that families do not change their contributions immediately after their incomes change.…”