Who Gives More To Charity?

Conservatives frequently claim that they give more money to charities that help the poor than liberals do.

Is it true?

I did some digging and came up with some numbers. In 2010, individuals and their estates gave over $290B to charities.  By far the largest category, (35%) of all charitable giving went to churches.[1]  That’s over a hundred billion dollars. The next largest recipient was educational institutions at about $40B.

White evangelical Christians are big contributors to their churches, and they are very, very conservative.[2] But how much of those donations actually go to help the poor? Churches are not required to disclose their finances to the IRS, as secular charities are. Liberty University lists the following expenses for a typical church:[3]

  1. Payroll – 42%
  2. Construction and maintenance of buildings – 20%
  3. Religious Programs – more than 17% (Christian education, youth ministry, missions, etc.)

So at least 80 cents of every dollar collected as a charitable donation does absolutely nothing to help the poor. It simply covers the operating costs of the church and supports its marketing and sales programs. How much of the remaining twenty cents goes to real charity work? The people who know are not telling, but anecdotal evidence suggests that it is typically around 5%. Five cents out of every dollar contributed to churches actually goes to programs to help the poor.

Secular charities are required by IRS rule to file periodic financial reports. Organizations like Charity Watch monitor charities and recommend those that limit administrative costs to 35% of total revenues. That is a lot more efficient than faith-based charities, but still nothing to brag about. I have read that some of them spend more than half their income on fundraising. So 50 cents of every dollar they raise is spent chasing more dollars!

To those who say that government is less efficient at running social programs than private organizations, it should be noted that the total administrative cost for Social Security in 2010 was 0.9% of total expenditures.[4] Of course, government programs do not have to worry about marketing and sales, or, in the case of private charities, fundraising costs.

I have long been opposed to tax deductions for both religious and secular donations. A tax deduction is equivalent to a government expenditure…money not collected is the same as money spent. The big difference is that the government has no control over that expenditure…neither where the money goes or how much. I think government expenditures should be explicitly authorized by legislation so that they can be examined and debated…not blank checks hidden in the form of tax deductions. I will have more to say about this in another article coming soon. Stay tuned.

 

REFERENCES

[1] http://www.nps.gov/partnerships/fundraising_individuals_statistics.htm

[2] http://www.people-press.org/2012/06/04/section-9-trends-in-party-affiliation/

[3] http://www.christianitytoday.com/cbg/2002/sepoct/27.136.html

[4] http://www.ssa.gov/oact/STATS/admin.html

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