The philanthropy of the wealthy is laudable, but a healthy and effective civil society is built on the generosity of ordinary people. We should be doing much more to celebrate the latter.
On Friday 14 March the Stanford Social Innovation Review published an article by my colleague Ted Hart, CEO of CAF America entitled Leading the Way to Greater Global Giving: How celebrating collective generosity in the United States can boost philanthropy worldwide.
In the article, Ted focuses on the extent to which the cultural narrative on charitable giving in the USA is skewed towards the philanthropy of the famous and the very wealthy and why. He then speculates on what effect this might have on the development of cultures of giving in emerging economies which are influenced by the American example.
That the United States is the most generous country in the world when it comes to charitable giving is beyond dispute. In 2012, Americans gave $316 billion to charity, and according to the annual Giving USA report, approximately $228 billion of that came from individuals. Americans give more to charity, both overall and per capita, than any other nation.
As the largest economy on earth it is perhaps unsurprising that the USA raises the most revenue for charitable causes in absolute terms. But few are aware, or would predict, that the USA is the most generous country in the world not just in terms of total money raised, but in terms of the proportion of people who engage in charitable activity. The USA ranked 1st in the 2013 World Giving Index in terms of a combined score for the proportion of people giving money to charity, volunteering and helping a stranger every month. Any negative assumptions about apathy in the USA should be dropped when it comes to charity in the face of the evidence which lies before us. Ordinary Americans are the most engaged charitable people in the world.
It is perplexing then that when we hear about charitable giving in the USA, we mostly hear about the philanthropy of the very wealthy. For Ted, one possible explanation for this could be the “national predilection for individualism”. He cites Hofstede Centre research into national and organizational culture which describes American culture as “highly individualistic.” Mr. Hart explains that from its inception, the United States has valued the rights of the individual and set limitations on the power of the few over the many. Indeed, he also cites a recent San Diego State University study of language in publications over the past 50 years even suggests that individualism is continuing to rise in America.
This, from the perspective of an international audience, is where Ted Hart’s article gets particularly interesting. He speculates that an excessive focus on High Net Worth and celebrity philanthropy is blinding us to the power and importance of mass engagement in giving time and money to charitable causes. There is a danger that we are creating the impression that civil society can be developed and be impactful with the resourcing of the wealthy minority alone. But such an impression misrepresents the story of how civil society has grown to prominence in the USA and many other nations. History shows us that for civil society to be effective, it must be accountable to a diverse cross section of society. For not-for-profits to represent the interests of the many, it cannot be directed by the few.
As Ted Hart rightly points out, the failure celebrate the huge generosity ordinary people could have a detrimental effect on the future of civil society in developing nations. He states that:
“By failing to recognize that widespread involvement in charitable activity is just as important to a healthy not-for-profit sector as financial resources, we may be missing a historic opportunity for the United States to influence the development of global civil society.”
This point is particularly salient for the Future World Giving project which estimates that if the expanding global middle class were to give the same proportion of their income to charity as people currently do in the United Kingdom (0.4 percent) middle class donors would generate $224 billion a year by 2030. Though a similar figure is hard to establish for the United States, 1 percent seems like a reasonable estimate, given that total charitable giving currently accounts for 1.45 percent of gross domestic product (GDP). If the world’s expanded middle classes were to match this conservative estimate of American generosity, they would be raise approximately $556 billion a year in charitable funds by 2030. Put another way, the world’s middle classes could generate charitable funds equivalent to the current GDP of Switzerland—currently, the world’s 21st-largest economy. If the next generation of global middle classes were to give like Americans, it could more than triple the $175 billion that Jeffery Sachs estimates we need to eradicate extreme poverty.
So given that we are experiencing perhaps the greatest social transformation in human history, with billions of people set to move from a subsistence lifestyle to one of relative affluence, we should see promoting the power of mass engagement in charitable activity as a means for change in and of itself. Ted lays out two ways in which Americans can do this that I think work for most nations.
“First, we can work with governments to create the right conditions for charitable giving to grow. As part of its Future World Giving project, CAF will be looking at how policies implemented by governments have either helped or restrained philanthropic giving in three crucial areas: building trust in civil society, supporting an independent civil society, and motivating people to give. We will also publish a framework of recommendations to guide governments toward better policies for encouraging giving.
Second, we in the United States can help ensure that the world’s generosity increases in parallel to its emergent prosperity by celebrating our own collective achievements. Because the everyday acts of generosity and kindness that power our civil society should be a beacon for the developing world to follow. By showing our pride in our position as the most engaged charitable society on Earth, we can encourage others to strive and aspire.“
You can find out more about CAF America at www.cafamerica.org.
Ted Hart’s Twitter handle is @tedhart