We sometimes get questions about who donates to charity organizations. Well, the fact is that wealthier Americans, including the top 1% of those by household income, donate the majority of funds that charities receive each year. The top one percent of household earners are responsible for about 33% of aggregate charitable donations each year and households earning over $100,000 per year (which is inclusive of one percenters) are responsible for about 52% of all donations.
There are different surveys and data points out there, but they all show the same thing. Rich people and higher earners give the majority funds that allow charities to continue to operate. A much higher percentage of those households also give back. What this means is that the chances are that the financial aid someone receives for paying their rent or utility bills, charitable homeless prevention programs, food assistance and so much more is probably only available due to the generosity of higher earners.
High earners are responsible for the majority of charitable donations
As noted, studies vary. However there is a consistent theme among them, no matter which data point you use.
- Almanac of American Philanthropy and Philanthropy Roundtable indicates that about 33% of charitable donations come from the top 1% of Americans.
- The IRS shows that Americans with incomes over $100,000 per year contribute about 52% of what charities receive each year, even though American households over 100K make up only about 29% of the population.
- Data from the Tax Policy Center also shows that higher earners are much more likely to contribute. Households earning under $50,000 per year, only about 7.5% of those households donate to a charity. Households earning from 50,0001 to $100,000 per year, 35% of households in that income range donate to a charity. Households earning $100,001 to $500,000, 71% of those families donate to charity and the percentage goes up from there. Once again, a much higher percentage of higher earning households give back to charities and the percentage of low income households that give to charities is minimal.
While the charitable donation amounts are hard to get and are reported in different ways (as some data/surveys depend on IRS tax data and whether someone itemizes or not, some reports of charitable giving depends on surveys, some data depends on the charities themselves, etc.), the fact is all the sources of data indicate similar things…higher earning people donate the most money to charities and are also much more likely to give to charity. This in effect allows those organizations to keep operating.
The top earners in the US also pay the vast majority of taxes as we reported, and about 44% of American households (low to even moderate income ones) pay zero dollars in taxes each year.
Impact of charitable donations coming from high income households
We often have people telling us a charity won’t help or a non-profit organization is out of funds. Some people are sadly entitled and think a charity has to help them. The fact is these organizations can often only help them in the first place due to those funds that come from higher income households…as if higher earners stop donating, the amount of financial assistance would given to the needy would be much less, if available at all. Who knows (and while speculation) maybe some non-profits would need to close their doors and shut down.
There are people, many lower income households, that say just tax the wealthy. Well if the nation did that it would in some ways hurt lower income households who say that and who turn to charities for help. Now would the government step in to offer more financial aid to the needy as maybe they would have a higher tax base? Would higher earners relocate? Would the entire economy get hurt? Who knows. But the fact is there is so little critical thinking and thoughtfulness in this country, as people never ask themselves those questions on what the impact may be as it is generally complicated. (That would be a great post on lack of critical thinking.)
Regardless of your income, whether you depend on charities or contribute to them or not, the fact is higher earning families, in particular those making over 100K per year as well as the top 1%, are responsible for donating the majority of what Americans give to households. So, if you use a charity for help, keep in mind that the money to help you pay your bills more likely than not came from a higher income household…and that is a fact.