Saturday, February 17, 2007

"Who Really Cares" review, part 2 of 2

Buried within Arthur C. Brooks' rambling rumination about philanthropy and politics in the U.S. are some points that are firmly rooted in meaningful data and which are worth thinking about.

(a) it's pretty clear now that tax deductibility is not a major factor in the ongoing boom of individual giving in this country. We know this because in 1986 the top federal income-tax rate was sharply cut, and in 2001 so was the inheritance tax; neither of those changes slowed down the rise in giving. About the non-rich this was predictable given that two-thirds of all taxpayers don't itemize and hence have never gotten any benefit from deducting charitable gifts. The surprise perhaps is that giving by the wealthy is also apparently not directly influenced by tax considerations. (Brooks also asserts that both wealthy and poor households donate higher fractions of their incomes than do middle-class ones, but unfortunately he doesn't provide specific data supporting that but just cites a different author's claim on it.)

(b) Brooks convincingly shows that religious people are more generous across the board: people of all faiths give more to non-religious causes than do people who aren't religious. [They also, naturally, give much more to churches and church-affiliated non-profits than do secular folks.] The pattern holds whether religious folks are politically liberal or conservative. The data supporting those statements is surveys, of which I am generally dubious as noted yesterday, but on this point there are too many surveys all pointing the same way to allow for reasonable doubt.

(c) Brooks also convincingly shows that in this country conservative voters are more generous than liberals. This conclusion is partly driven by surveys but also shows up in hard data, such as that the states which voted for John Kerry in 2004 mostly ranked below average in charitable giving per income dollar. (Meaning, obviously, that the states which went for Bush generally ranked higher in giving as a percentage of household incomes.) A more-sophisticated analysis of state data which found the same breakdown can be found here. And survey data consistently finds similar splits for non-monetary philanthropy such as volunteerism and giving blood.

However Brooks is much less persuasive in arguing that liberal households' lower philanthropy is driven heavily by political beliefs: that favoring income redistribution makes people less philanthropic. I certainly have no truck with the brainless cliche about how "a society that has more justice is a society that needs less charity," but the factual case for such an attitude being a cause of less giving is thin. The core causation seems simpler to understand: as Brooks himself points out, secular conservatives give a bit less than secular liberals while religious conservatives give more than religious liberals, but religious people of all political stripes give much more than do non-religious people.

If that is correct then it has troubling implications for non-profit fundraising going forward, because the percentage of Americans who are non-religious is now rapidly increasing. (Different surveys all identifying that trend can be read here, here and here.) Will it turn out that the steady increase in individual philanthropy that's occurred throughout my lifetime is unsustainable? Or can the non-profit sector in the 21st century convince secular citizens to participate in civic giving and volunteering as enthusiastically as their churchgoing 20th-century parents and grandparents did?

31 comments:

piglet said...

I'm a little disappointed by that weak review. E.g. you take the "Red states are more generous" claim serious but other authors say that when corrected for cost of living, the claim disappears (e.g. http://www.boston.com/news/education/higher/articles/2006/12/10/who_gives/). Also, since Red states tend to be more religious, when religious donations are factored out the result would likely be quite different. Brooks doesn't however provide that data. Brooks also makes comparisons bewteen US and Europe without even mentioning that government funding in Europe is in several areas (excluding the military ;-) far more developed. E.g. few people donate to Universities, opera houses or libraries, because those institutions are tax-funded. Also, churches in some countries (e.g. Germany) are tax funded so even church goers will "donate" much less to hteir churches than Americans. So I have to say that even where Brooks appears to cite hard data, I am very skeptical.

Paul Botts said...

Thanks for the thoughts. I'm quite skeptical of much of what Brooks claimed myself, hopefully that came across in my two-part review. I'm not instantly buying his claims based on surveys any more than I do the surveys claiming that 90% of Americans believe in God and so forth.

The widely-held conventional wisdom that government funding in Europe is "far more developed" is in fact just as much legend as fact, but you're certainly right that many taxpayers there (and here) think it to be true and that is likely one reason they are less charitable.

Higher cost of living as an excuse for lower charitable giving...eh, maybe. But it's a bit of a circle, since the higher incomes in San Francisco are a core _cause_ of the higher cost of living. (This is quite obvious if you've spent any time there, which I have; and I live in Chicago which has a lot of the same dynamic going on.)

That Boston.com article took some unfair liberties regarding Brooks' point about giving by religious folks. In the first place giving that pays for the preacher's salary is every bit as charitable as giving that pays the salary of a staff ecologist or an artistic director. In the second place, Brooks' point is that religious families apparently give more to _secular_ causes than do nonreligious families (with the very large caveat that this assertion is based on surveying).

piglet said...

Two comments:

"The widely-held conventional wisdom that government funding in Europe is "far more developed" is in fact just as much legend as fact"

Dp you have any evidence for that claim? The points I mentioned come from my own experience. Germany certainly has no fewer theaters, opera houses or Universities, relative to population, than has the USA, and surprise, these are all state funded. The churches themselves are tax funded so they need less charity. Also, in countries with universal health care, people don't get ruined by sickness, so they don't need charity to help them out, as is often the case in the US. These are just a few very realistic examples.

"In the first place giving that pays for the preacher's salary is every bit as charitable as giving that pays the salary of a staff ecologist or an artistic director."

I wouldn't call any of these causes "charity" in the proper sense of the word. The problem is that Brooks uses the word "charity" in dual ways. One, it is an act that shows "compassion" for the poor, the weak and the suffering. Two, it is whatever the tax code recognizes as tax deductible. The result is, in my view, dishonest. When he blames Liberals for being less generous, he does so on the ground that Liberals claim to care for the poor. Liberals, he complains, always accuse Conservatives of not caring for the poor, so he sets out to prove the contrary. Btw what Brooks doesn't mention at all is the context of this accusation: it refers not to the behavior of individual Conservatives but to the behavior of their politicians when they cut taxes for the rich and food stamps for the poor on the same day. Anyway, he uses definition two to say, see, Liberals give less to charity. But Liberals, to my knowledge, have never claimed to care specifically for churches or opera houses or political think tanks, so it is unfair to criticize them if they don't donate as much to these causes. In order to prove his point, Brooks would have to demonstrate that Liberals are less generous to causes that they specifically espouse, i.e. supporting those in need. That is the standard of proof required.

At one point, Brooks mentions the fact that the "real charity" part of charity has declined since the 1960s and interestingly, he then points out that there is less poverty today and that government support for the poor has increased dramatically over that period, so there is less need. But if that is true then it weakens his own position a lot. He seems to concede that government programs do work and reduce the need for charity. And who initiated those programs? Liberals. So after all, Liberals do not only talk, they demonstrably act politically to help those in need, far more than conservatice charity does - just in a way that Brooks choses not to recognize.

Brooks derides the idea that social justice is needed more than charity but you have to admit that preventing suffering is preferable to trying to alleviate it via charity.

Paul Botts said...

"any evidence for that claim?"
Well sure; I'd have posted about this before now if I thought many people still believed that particular cliche. I'll pull together some stuff for a post next week or the week after, right now I'm heading out on some travel and will only be able to manage quickies from the road.

We'll have to disagree about the issue of whether supporting an artistic director's salary represents "charity", for me it obviously does. Your point about Brooks' erratic uses of that word is a good one, though, and another example of the flabbiness of his arguments.

That Brooks thinks "real charity has declined since the 1960s" does not of course make such a silly statement true. The facts are, of course, wildly to the contrary in the U.S.; he might as well be claiming that Americans today are slimmer than our grandparents or dress worse than we did in the 70s.

piglet said...

Paul, I am concerned with the ideological context in which Brooks has (deliberately) placed his book. Here is how
conservative reviewers
are trying to frame the debate, based on their reading of the book:

“When conservatives say that low taxes and spending should be supplemented by a safety net that is privately funded, they put their money where their mouth is.”

I don't think this commentator talks about a safety net for artistic directors. He isn't referring to opera houses, churches or ivy league universities, nor to environmentalist or political causes. He is talking of a "safety net" for those in need, provided by private charity. He is trying to justify the Conservatives' political selfishness (e.g. the Christmas 2005 cuts in school lunch and food stamp programs, accompanied by $56B in tax cuts - once again no mention by Brooks) with their private generosity.

So any discussion about this issue must separate *that* kind of charity, which I called "real charity" for lack of a better term, from the rest. And it appears that it is only a fraction, and it is diminishing - not in absolute but in relative terms. This appears from figures that Brooks himself cites. If you have different figures, I will be curious. Specifically I would be interested to see data about "safety net" charity as a fraction of GDP. For the conservative argument to be legitimate, it better had be substantial. If not, then it is time we call the bluff.

The "cliche" of higher government funding in Europe: total government spending in the EU averages 48% of GDP, versus 37% in US and 41% OECD average. What is it you don't agree with?

piglet said...

P.S. Found a study on international giving:

The evidence in Table 1 suggests that personal tax might well be an important factor in giving levels: however, it is the level of social security contribution and not personal taxation which seemed most significant.

The US charity figure is given as 1.67% of GDP.

Paul Botts said...

I didn't review what conservative (or for that matter liberal) commentators might be saying about Brooks' book; I reviewed Brooks' book. Uses or spin that commentators might apply to an argument are irrelevant (for me at least) to an examination of the strength of the argument.



"total government spending in the EU averages 48% of GDP, versus 37% in US and 41% OECD average."
Percentage of GDP? That's hardly a useful measure of how "well developed" the nations' public sectors are. The U.S. economy generates a drastically higher GDP per person than those of any large European nation (the International Monetary Fund says U.S. GDP per capita is more than a third greater than those of Germany, the UK, France, Spain or Italy). Hence actual public spending per person in the U.S. is equal to or a bit higher than any of those nations.

And whereas in Europe spending on the social safety nets is flat or declining (because those nations' demographics are now driving the national governments towards insolvency, and economies with 9 or 10% unemployment rates cannot generate greater government revenues), U.S. social safety net spending is zooming upwards. The current administration has increased federal nonmilitary discretionary spending more than any president during my lifetime, which includes LBJ. And entitlement spending just keep zooming upward: Medicaid spending by the 50 states has been rising at 10 percent per year, federal Medicare spending was rising 9 percent per year even before the huge new prescription-drug benefit was added to it, Social Security spending keeps rising steadily.

piglet said...

"I didn't review what conservative (or for that matter liberal) commentators might be saying about Brooks' book; I reviewed Brooks' book."

Let me make it clear that my beef is with Brooks, not with you. I enjoy having this exchange and hope that it may help us both clarify our thoughts. I contend that Brooks makes exactly the same argument that National Review is reading into it, maybe less explicitly so (or less consistently so). In any case, my point is that "charity" must be differentiated by cause in order for the moral argument that Brooks is making to be legitimate. E.g. as others have pointed out, when wealthy alumni make donations to ivy league universities, they mainly support their own social group. Generous this may be, but "charitable", no.

I, and others, mentioned church because it is the biggest piece of the total charity cake and people who are not religious can hardly be criticized for not making religious donations. One commenter likened churches to clubs. Thinking about this, Unions came to my mind. Unions often provide social structures, relationships and solidarity to their members, in that respect not unlike churches. Do Unions count as charity, and Union dues as donations?

"Percentage of GDP? That's hardly a useful measure of how "well developed" the nations' public sectors are."

Well, virtually all economists believe that it is a useful measure and rely on it in their international comparisons. And all statistics about poverty show the US behind most other developed countries (http://en.wikipedia.org/wiki/Human_Poverty_Index), despite its fantastic wealth, nominally high government spending and (pat on the back) generous charity donations. I wonder whether you have an idea why that is?

We can also look at concrete examples. My city has a performing art center named after its donor family. When I step into the public library, a huge wall with the engravings of donors catches my attention. The university in town, although it is a state land-grant institution, has several buildings named after donors. Visit a comparable German city and you'll find a theater that is just called City Theater and which is, like the City Library and the university, almost fully tax-funded. Like it or not but Germans take it for granted that these institutions should be tax-funded, just like highways or sewer systems.

And to look a bit at the "safety net" aspect of it, let me just note that Germany's public health insurance funds, which are non-for profit corporations (aka "charity"), will insure all children (and dependant spouses) at no cost. Zero. Whereas the USA has 8 million children uninsured, who must depend on charity in some way or other, or simply are being denied health care. When Brooks and his friends deride Germans for lacking both generosity and "family values", I can get a bit uncharitable to be frank.

You might point out that US government spending on health care is actually quite high in absolute numbers, but I contend it is "underdeveloped" in the sense that it fails to provide for a large number of people in need. And the charity "safety net", contrary to what some conservatives want us to believe, doesn't make up for that lack.

Paul Botts said...

"E.g. as others have pointed out, when wealthy alumni make donations to ivy league universities, they mainly support their own social group."

This example is obviously untrue now, at least the in the U.S., where Ivy League universities are pricing their services in a highly-progressive manner (see my recent posts on the subject). Top-level college educations in Europe are still deliberately restricted to the children of the elite and certainly that used to be the system here, but in the here and now a wealthy alum of Princeton would be hard put to find a more _effective_ and socially-progressive use of her $1 million than giving it to the alma mater.

"I, and others, mentioned church because it is the biggest piece of the total charity cake and people who are not religious can hardly be criticized for not making religious donations."

In the first place, the fraction of all charity going to churches in the U.S. has been declining steadily for 30 years now so this argument is really kind of dated. In the second place, this point as stated is a straw man since the relevant point of Brooks' which I mentioned is about giving by religious families to SECULAR organizations not their churches.


"Do Unions count as charity, and Union dues as donations?"

No, because they are literally compulsory: you don't pay union dues, your kids don't eat.


" "Percentage of GDP? That's hardly a useful measure of how "well developed" the nations' public sectors are." Well, virtually all economists believe that it is a useful measure and rely on it in their international comparisons."

Heh! No economist uses that fraction to compare the strength of different nations' public sectors, which is the issue you applied it to. That ratio can be and is used to answer different question to which it is relevant; this isn't among them.


"And all statistics about poverty show the US behind most other developed countries (http://en.wikipedia.org/wiki/Human_Poverty_Index), despite its fantastic wealth, nominally high government spending and (pat on the back) generous charity donations. I wonder whether you have an idea why that is?"

Several excellent reasons come to mind, none of which support the idea that the U.S. does less well than Europe at helping the poor -- sorry!

piglet said...

"Top-level college educations in Europe are still deliberately restricted to the children of the elite" - and the evidence for that is?? Which country are you talking about anyway, Finland? UK? France? One cannot seriously discuss generalizations like that.

You say this is not true any more for US Ivy League. Okay, they are now making some efforts to enroll more poor students but read what the Chronicle of Higher Education has to say, April 7, 2006, "The Rich-Poor Gap Widens for Colleges and Students":

"At Princeton, Pell Grant recipients made up only 7.5 percent of the undergraduates in 2004-5. At Harvard University and Virginia, they accounted for 8 percent, a Chronicle analysis has found. By comparison, they made up 26 percent at Smith College; 22 percent at Berry College; and 39 percent at the University of Cincinnati.

The number of needy students on the campus is not just a concern at wealthy colleges, however. By age 24, only 10 percent of students from the lowest socioeconomic quartile have earned bachelor's degrees, compared with 71 percent from those in the top quartile, says Thomas G. Mortenson, a senior scholar at the Pell Institute for the Study of Opportunity in Higher Education. Despite those figures, in the past decade it was the nation's wealthiest families that enjoyed the biggest increases in financial-aid packages. Average student-aid packages for the top quartile of families, ranked by income, more than tripled from 1990 to 2004, growing by $4,555 after adjusting for inflation. But for families in the bottom quartile, the packages rose by just 55 percent, or $3,328. At the same time, average unmet financial need for families in the bottom quartile — with incomes of less than $34,000 — grew by 80 percent, to $5,527. Unmet need was effectively zero for the top quartile, in which families earned more than $95,007 in 2004."


Do you still think "The example is obviosuly untrue"?

"the fraction of all charity going to churches in the U.S. has been declining steadily for 30 years now so this argument is really kind of dated." It is still the biggest piece of the cake.

"In the second place, this point as stated is a straw man since the relevant point of Brooks' which I mentioned is about giving by religious families to SECULAR organizations not their churches."

But the difference, according to Brooks, is much smaller on that measure. Since you agree that the data are questionable anyway, and since other data (e.g. here) disagree with Brooks', his argument is considerably weakened.

"Several excellent reasons come to mind, none of which support the idea that the U.S. does less well than Europe at helping the poor -- sorry!"

You don't have to apologize for failing to provide any evidence, or for failing to make any useful contribution to what I thought was an important question. That's entirely up to you. I just have to tell you that there is no point continuing a debate with somebody who doesn't care to make debatable statements. Have a good day.

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