Friday, December 23, 2005

The Scrooge Factor, Charity and Justice

Did you see or hear of the new report published this week by the NewTithing Group, a philanthropic research organization based in San Francisco?

You can find the full report, based on IRS data research, at

Here are a few of the findings:
  • Working Americans who earn $50,000 to $100,000 annually are two to six times more generous with their investment earnings than Americans who make more than $10 million a year--this group donated more than 2.5 percent of their assets to charity, or six times the amount given by more wealthy workers.
  • The least generous of all working Americans were taxpayers 35-years-old and under who made between $500,000 and $10 million annually--this group donated an average of 0.4 percent of their assets to charity.
  • Wealthy Americans age 36 to 50 with income above $10 million made gifts equal to 1.54 percent of their assets or more than three times that of their younger peers.
  • Wealthy single men gave 1.5 percent of their assets to charity, as compared to 1.1 percent by women in the same income class, though women contributed more in real dollars due to the fact that they were far wealthier than the men in this elite group.

Interesting analysis, huh?

When it comes to poverty, urban reconstruction and real opportunity creation, charity will always have an important role to play.

But, please, make no mistake about it, charity will never be enough.

Public values must be expressed in mandated public efforts to assist all of our neighbors to do better for themselves and their families.

It is time we woke up to the fact that if we seek real progress for the entire nation, we must be committed to move beyond charity to justice and real community development at the bottom. It is simply a matter of national will, pride and community commitment.


Jeremy Gregg said...

Unfortunately, it's the same on a national level.

According to Newsday:

"In total dollars, the U.S. government is indisputably tops, with $16.2 billion in non-military foreign aid to poor countries in 2003, according to statistics compiled by the Paris-based Organization of Economic Cooperation and Development, which tracks aid spending by the 23 richest countries. But when measured as a percentage of national income, the U.S. ranking plummets.

"The $16 billion is one-seventh of 1 percent -- 0.15 percent -- of total U.S. income," says Steve Radelet, a senior fellow at the Center for Global Development in Washington and a former Treasury Department official. "The fact is that as a dollar amount it's the most, but as a share of our total income it's the lowest of all major countries."

Larry James said...

You are correct, Jeremy. And, to be absolutely clear, that fraction of 1% is not measured against overall GDP, but against the revenue received by the federal government.

Tim said...

OK, Larry--your data are convincing and compelling. So, what next? What solution are you suggesting?

Larry James said...

Tim, glad you asked.

Elect officials from either party--both actually--who are committed to establishing public systems that are fair and empowering and that continue to emphasize personal responsibility and reward effort and work.

I am not in favor of rewarding persons for doing nothing and the vast, vast majority of low-income Americans agree.

That said, we need to fully fund the following:

--Public education at the state and local levels
--Public health issues must be addressed that involve communities in pursuing pervention while being guaranteed health care. Health care can no longer operate as a market commodity.
--Housing support for low-income working families must be increased, not curtailed. The housing voucher program for renters must be expanded to encourage development of more units. Homeownership can be promoted, but there must be a lower rung on this ladder.
--Higher education and trades training must be supported further, not cut back.
--Child care for working parents, the Earned Income Credit benefit, nutrition programs and transportation assistance all need to be further developed.

What we fail to recognize as a society is that spending in these areas acts as a stimulus to the overall economy--much more so than tax cuts that benefit the top 3% of the economy.

In addition to the public reform and movement back toward moderation and sound thinking, the faith communities need to rediscover their true mission and value base as it relates to economic justice and fairness in view of poverty in America. I could say much more here and in terms of basic civic understanding in a nation built upon a democratic, social covenant/compact, but I will stop here.

Tim said...

Well said, Larry. I think you'll have a small problem with your argument about tax cuts, since 97% of taxes are paid by the top 50% of taxpayers, so tax cuts benefit far more than just the top 3% of the economy.

Nevertheless, I will concede your point that when taxes are cut, it is often programs that help the needy that are the casualties of such cuts, and people who have disposable income are usually not inclined to take up the slack by charitable giving. This is, essentially, the point you are making--right?

So, at least one serious problem seems to be, How do we develop a just and compassionate society to help the needy among us without resorting to a more confiscatory tax policy than we already have?

I say "more confiscatory" because you will find it very hard to argue, even among compassionate Christians, that they are "not paying enough taxes" when they see anywhere from 20-35% of their earnings going to some form of governmental entity. I suspect that a more effective approach is likely to be the one you are taking in your previous post (perhaps minus the "tax cut" comments)--a fact-filled approach that informs people of what is needed and what can be accomplished with the right kind of help, so that people who have not seen what you see every day can "get the picture" without thinking simply of someone who is asking for a "welfare handout."

Finally, is there any empirical evidence to support your claim that "spending in these areas acts as a stimulus to the overall economy--much more so than tax cuts"? If so, you should be shouting this from the rooftops at every opportunity. This is the kind of information that is more likely than anything else to convince skeptics of the wisdom of your views.

Jeremy Gregg said...


I cannot find the source at the moment, but one study that I know of was conducted by Baylor Health Care System . . . CDM's partner in the area of community health. Baylor found that, for every $1 they invested in CDM's health clinic, they saved themselves around $1.75 in costs in their emergency room.

Actually, there is an article on it here:

"Baylor Medical Center estimated that its partnership with Central Dallas Ministries helped Baylor Medical Center avoid approximately $250,000 in direct costs for indigent E.D. visits over the last three years, based solely on a 21% reduction in utilization of the emergency room for primary care by the people living in the zip codes surrounding the hospital and the ministry clinic."

Investing in programs that support low-income families makes sense. These programs prevent them from falling into crisis situations, which are inevitably paid for by the government. Therefore, even if the entire argument is fiscal responsibility, it makes sense to invest in the programs that Larry mentioned.

The difficulty, of course, is that people do not want to pay today in order to save tomorrow . . . especially if those savings will be realized by the next generation.

Larry James said...

Tim, thanks for your comments.

Part of what is needed is rational thinking about taxes.

What do we receive for 25-35% taxation? What do we lose when taxes are cut?

The marginal tax rate during the Eisenhower administration was around 70% at the top.

Sure everyone pays, but those who make the most pay too little, especially as a % of their total.

Consider this fact. I did a study of the economic impact of the 150,000 families in Dallas County who are eligible for food stamps but who do not receive them. The loss in spending/buying power annully at retail grocery stores totaled over $250,000,000--that is right, million! Think that Kroger or Albertsons would understand that metric?

Read Paul Krugman in today's New York times at: http//

Most of us don't realize what is going on and how much it is costing us as a naiton.

Anonymous said...

Ahhh, yes, but the rich would rather have their meager money today than let the community have far greater funds in the future.

Opportunity Cost.

Thank you,