The Business of Giving
It pays to be charitable.
Editor's Note: Minyanville would like to welcome our newest contributor, C. Warren Moses.
C. Warren Moses is the CEO of The Children's Aid Society, one of the nation's largest and most innovative non-sectarian agencies. Founded in 1853, Children's Aid serves 150,000 of New York's neediest children and their families with a network of services that includes adoption and foster care services, teen pregnancy prevention, education, health and recreation, community schools, neighborhood centers and camps.
Please join us in welcoming him!
We make a living by what we get, we make a life by what we give.
- Sir Winston Churchill
What a great thought!
Some of the primary beneficiaries of charitable giving are the givers themselves, but their impact is so much greater. Yes, personal giving can reduce income taxes, but it can also increase tax revenue. It can reduce government spending, but at the same time stand in for government research and development. Corporate giving generates positive publicity, thereby enhancing a company's image and, by extension, potential sales. Finally, giving feels really good, which may be the best benefit of all.
Charitable giving is also a significant piece of our economic engine: In 2006, according to Charity Navigator, charitable giving accounted for 2.2% of gross domestic product.
Welcome to my first Business of Giving column, with which I plan to provide information and insight into the increasingly prominent world of philanthropy. It's for those already giving and those thinking, "I really should give - where do I start?"
Per the Minyanville credo, life is about earning, spending, saving and giving. Donors earn, then generously give to nonprofits, which in turn spend on programs and advocacy for the greater good: improving the environment, helping lift people out of poverty, fighting for global literacy and so on. As we all work to uplift our society and our world, we all thrive. I can think of no better return on investment.
Charitable giving is in the news regularly and is even the focus of a weekly reality TV show. Charity Navigator's most recent report on giving calculates total donations to not-for-profit organizations at $295 billion in 2006, reflecting a 1% increase from 2005 (adjusted for inflation). Individuals accounted for the majority of giving at $245.9 billion (83%), followed by foundations at $36.5 billion (12.4%) and corporations at $12.7 billion (4.3%).
Bill Gates, Warren Buffett, Oprah Winfrey and Angelina Jolie may make the headlines, but philanthropy isn't limited to the elite. According to the same source, Americans are among the most charitable people in the world. It's estimated that between 70% and 80% of American households make charitable monetary contributions at an average of $1,000 annually.
Amazingly, according to an excellent article by Arthur C. Brooks called A Nation of Givers, the most charitable households are low-income working families. Brooks notes that families of modest means give away approximately 4.5% of their income, compared to 2.5% for middle class households and 3% for high-income households.
The spiritual benefit of giving is immeasurable, but very real to those who give, whether they contribute money, volunteer time or donate goods. And it can be contagious. Many volunteers are 'lifers,' who continue volunteering and giving of their time.
A prime example is Children's Aid Society's (CAS) Chairman Edgar R. Koerner, a retired Lehman Brothers investment banker. Koerner worked with children in one of New York's most notorious welfare hotels in the 1980s, after which he continued to teach kids at one of CAS's community centers, helping them write poetry and produce an acclaimed newspaper.
Those who have discovered the satisfaction of giving to charity understand that it's one of the joys and privileges of life. In future columns, I'll discuss what makes a nonprofit a charity, how to find and evaluate charities, the financial impact of giving on the charity and on society, why corporations give and some new theories of philanthropy.
I'm looking forward to opening the discussion on charitable giving to the Minyanville community and providing as much insight as I can from my 41 years in the business, starting as a frontline social worker and continuing through to the corner office, all with a passion for the business of giving and its impact on the causes that move our global society forward.
I also encourage feedback from readers. If you have questions about giving, fundraising, starting a foundation or joining a board, pose them now on The Exchange. There are likely hundreds -- perhaps thousands -- more users with the same query.
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