Who Really Cares? Answers Aren't as Clear as Book Suggests

by Alan J. Abramson, Director,
Nonprofit Sector and Philanthropy Program, The Aspen Institute

With Who Really Cares: The Surprising Truth About Compassionate Conservatism, Arthur Brooks has written a readable, intelligent, thought-provoking book about an important but overlooked subject -- that is, philanthropy.   Although in many ways this seems to be philanthropy's moment in the spotlight, it's still largely an afterthought in this country.

Our opinion leaders certainly spend much more time writing and talking about the state of government and business than about the condition of the third sector of our economy, which is made up of the nonprofit sector and philanthropy.

So it is terrific that Arthur is correcting this oversight with a book that seeks to put charity more firmly on the map in this country.  However, while there are many things to commend about Arthur's book, I do also have a number of concerns or reservations about his book.  In particular, I'd like to address three issues:

• the state of knowledge about philanthropy
• the special case of giving to religion
• the question of whether philanthropy and government are competitors or partners

Quality of Information about Philanthropy

My first point of concern has more to do with the overall quality of the information we have available about philanthropy than it has to do with Arthur's book in particular.  I think Arthur makes the most out of the data he has to work with.  And he has really gone the extra mile to find and use a broad range of data sources.  But the fact of the matter is that the data on giving is just not very good.

Giving data is very soft; that is, it's hard to know how accurate it is.  Different sources report very different numbers for the same phenomena.   For example, Arthur notes that different studies cite the percentage of U.S. households that give to charity as between 50 and 80 percent of households.  That's a pretty big range for a pretty basic -- and seemingly simple -- measure of giving.

It seems that we can't be entirely sure whether 50 percent of American households give to charity or 80 percent of households give to charity.  And you can imagine we're probably even less sure about how much the households that give to charity actually give.

We do, of course, have estimates of how much people give to charity.  Some of these estimates come from telephone or even in-person interviews.  I can imagine someone calling me on the phone and asking, "Mr. Abramson, how much money did you give to charity last year?"  God only knows the number I would come up with and the relation of my answer to the amount I truly gave. 

So I think that much research on giving is built on a rather flimsy foundation.  This is not to say that this research is not worth doing.  I do think that estimates are better than no numbers at all.  However, improving the data on giving ought to be a priority for the field.  

Perhaps because of the soft data, there are several points on which Arthur's study just plain conflicts with analyses done by others.  For example, Arthur finds that inherited income stimulates charitable giving more than earned income.  In particular, he concludes that inherited income raises donations by about four times as much as earned income.  Arthur then builds on this finding to argue that eliminating the estate tax may not be so bad for charity after all, because those who inherit wealth give a good deal of it away.

However, in contrast, a chapter in another new authoritative book, the Handbook of Nonprofit Research published by Yale University Press, cites a study that comes to the opposite conclusion, that donors have a greater propensity -- up to six times greater -- to give from earned wealth than from inherited wealth.  I won't try to adjudicate the conflict.  But with the soft data and the different analytical techniques used by different researchers, it's probably not a surprise that different scholars come up with different answers to the same question.

Special Case of Religious Giving

On another point, however, I am more troubled by differences between Arthur's analysis and research by others.  While Arthur's book was published just in time for the holiday season, it was thankfully just a little late for the election season.  For I can imagine the election ads that could have been made from his book supporting generous, compassionate Republicans and attacking stingy, selfish Democrats.

But like so many election ads that were used by both sides, I fear that this one would have been built on flimsy evidence.  Arthur seems to make much of his finding that there is a correlation between political ideology and charitable giving.  That is, Arthur concludes that conservatives are more generous and liberals are more selfish.  According to Arthur, there is a nice overlay between the electoral map and the charity map, the red states are the most generous and the blue states are the most selfish.

In this instance, I think Arthur may be making a mountain out of a mole hill, following one of the worst aspects of election ads.  Arthur reports that conservatives give roughly $1,600 a year to charity, or about a third more than the roughly $1,200 given by liberals.  However, my guess is that the largest portion of the difference in giving between conservatives and liberals is due to greater giving to religion by conservatives, although Arthur doesn't quite give the appropriate figures, which is a little troubling.  My guess is that of the $400 difference in giving between conservatives and liberals, most of the difference -- perhaps $300 to $350 of the $400 -- results from the greater contributions that conservatives give to their churches.

Now, while giving to religion certainly qualifies as charitable giving, I do think that giving to religion differs in important ways from giving for some other purposes.  Religious giving has some similarity to giving to a club, in which some of the main beneficiaries of the giving are the members of the club.  As my minister reminds us during fundraising season, church members are the ones who get a good deal of the benefit from the church and are the ones who must cover the costs of the church.  There is really no one else to pay these bills.

While religious giving definitely qualifies as charitable giving, I don't think it really has the same character of compassion and generosity as giving to some other causes -- like a soup kitchen or shelter -- that do not so obviously benefit the giver.

If we exclude the $300 to $350 of greater religious giving by conservatives, then it seems that the argument that conservatives are more generous and compassionate than liberals hangs on the slim reed that conservatives give away $50 to $100 more a year than liberals to non-religious, secular causes.  And we don't really learn from Arthur whether the secular causes that are favored by conservatives with their extra $50 to $100 are more the club-like institutions of universities, hospitals, and museums, or whether they're more like soup kitchens and shelters.  Again, it seems to me to be making a mountain out of a mole hill to make such a big deal of conservative compassion based on such weak evidence.

And it is also the case that Arthur's map of the compassionate states in our country doesn't look much like the map that some other respected researchers have drawn.  Based on their own new study, John Havens and Paul Schervish, well-known scholars of philanthropy at Boston College, recently reported that some of the bluest states, such as New York, the District of Columbia, California, Connecticut, Maryland, New Jersey, and Massachusetts, turn out to be among the top 10 of the most charitable states.

Philanthropy and Government: Competition or Collaboration?

Another concern is that Arthur's analysis, and here he has lots of good company, emphasizes the competition or conflict between philanthropy and government.  He notes correctly that economic studies have found that when government money comes into a field, charitable dollars exit.  I might note parenthetically that the opposite may happen as well, as the Gates Foundation example may demonstrate.  That when philanthropic dollars move in, unless some care is taken government support may move out.

In any case, I think this paradigm of conflict between philanthropy and government while true can be overstated and cause us to ignore another important phenomenon:  the many partnerships between philanthropy and government.

The fact is that philanthropic and public dollars often flow together to the same nonprofits that are the ultimate providers of many public services.  In what I think is often a sensible collaborative arrangement, nonprofits draw heavily on revenue from both private donors and government to fund the delivery of vital services.

Incidentally, Arthur writes that private giving provides the primary support in America's churches, nonprofits, and community organizations.  While this is true for churches and some other organizations, it is simply not true for many, many nonprofits.  For the average nonprofit, more support comes from government and fees and service charges than comes from private giving.  In very round numbers, for the nonprofit sector as a whole, philanthropy accounts for 20 percent of nonprofit revenue, while government accounts for 30 percent, and earned revenue accounts for 40 percent.  

My point simply is that we should not overemphasize competition between philanthropy and government, and fail to appreciate the terrific partnerships that get so much done in this country.  We should all understand that government is currently a much bigger enterprise than philanthropy in the U.S.  It's fine to advocate for more philanthropy, as Arthur does, but we should recognize that philanthropy has a very, very long way to go to catch up to government.  

Toward the end of his book, Arthur notes that even though philanthropy still pales next to government in this country, compared to many European and other countries, the U.S. has chosen a system with more philanthropy and less government.  According to Arthur, this combination of bigger philanthropy and smaller government leads to happier and healthier people and a more prosperous economy in the U.S.  And, Arthur, as I've noted, would favor even more philanthropy and less government.

Other countries choose bigger government and smaller philanthropy.  They may worry more than we do about inequality and about needy people falling through the cracks.  To some other cultures, the safety net in the U.S. looks to be too close to the ground and to have too many holes in it.

Each country and culture organizes itself in a different way and strikes a different balance between competing values.  My guess is that we'll be arguing for some time -- within and between countries -- about whether social problems are best addressed through private philanthropy or government spending.