Summary: The United States is one of the countries with the highest amounts of charitable donations in the world. Charitable giving is essentially a universal behavior, primarily taking the form of individual donations, characterized by its grassroots and spontaneous nature. Caring for others and caring for the world are the primary motivations for Americans to make charitable donations.
Two major American billionaires, Bill Gates and Warren Buffett, called on other American billionaires to donate at least half of their wealth to charitable organizations, sparking a new wave of charitable giving in the United States. When Gates and Buffett visited China at the end of September, they intended to meet with Chinese billionaires, but unexpectedly, the Chinese billionaires avoided them. This was all because some Chinese billionaires feared being pressured to donate, which would be quite embarrassing in person. While there is no shortage of wealthy individuals in China willing to donate their entire fortunes, China has not yet formed a comprehensive system for social charitable donations, so it is understandable that the billionaires did not attend the "Hongmen Banquet" (a trap) set by Gates and Buffett.
Doing good is a virtue in Chinese culture, and giving back to society is also a social morality. American philanthropic culture has its own characteristics, but the principle is that it must come from an individual's sincere heart. Therefore, Gates also publicly stated that his visit to China was not to pressure Chinese billionaires to donate, but to discuss the ABCs of philanthropic culture.
How much is donated to charity in the United States each year?
According to statistics, the United States is one of the countries with the highest amounts of charitable donations in the world, and the countries with the highest amounts of charitable donations are mainly concentrated in developed nations, including France, Germany, the United Kingdom, Japan, Spain, the Netherlands, Sweden, Norway, and Canada. According to a report released by the Giving USA Foundation and the Indiana University Center on Philanthropy, the total amount of charitable donations in the United States in 2009 was $303.7 billion, of which individual donations were $227.4 billion, accounting for 75% of the total. Charitable donations from private foundations were $38.4 billion, accounting for 13% of the total. Charitable donations from bequests were $23.8 billion, accounting for 8% of the total. Corporate charitable donations were $14.1 billion, accounting for 4% of the total.
From the above data, we can see several characteristics of American charitable donations: First, American charitable donations are mainly individual donations. Statistics show that 89% of American households make charitable donations every year, with an average annual household donation of $1,620. The total of individual donations and bequests accounts for 83% of the total charitable donations, forming the main body of American charitable giving. Second, the proportion of charitable bequests is not low, which has a certain relationship with the massive estate tax levied by the U.S. government. Since charitable donations are tax-exempt, many Americans would rather donate a certain percentage of their inherited assets than hand them over to "Uncle Sam." Third, the proportion of donations from private foundations and companies in American charitable giving is not high, and among the $38.4 billion in charitable donations from private foundations in 2009, $15.4 billion came from family foundations. Overall, American charitable giving is essentially a universal behavior and a form dominated by individual donations, possessing a grassroots and spontaneous nature.
Who do Americans donate to?
In the past, American charitable donations were mostly concentrated on churches and universities, especially private universities. For example, the funding sources for Ivy League schools like Harvard and Yale rely mainly on donations. In 2009, the proportion of charitable donations in the United States for public services, international aid, and environmental protection all increased, reflecting some new trends in the direction of American charitable funds.
Of course, charitable donations to churches and education remain the areas where Americans donate the most. In 2009, the amount of donations from Americans to churches remained very large, at $100.9 billion, accounting for 33% of all charitable donations. Donations to education were $40 billion, accounting for 13% of all charitable donations. Donations to foundations were $31 billion, accounting for 10% of all charitable donations. Donations to medical and health services were $22.4 billion, accounting for 7% of all charitable donations. Donations to social organizations were $22.7 billion, accounting for 8% of all charitable donations. Donations to cultural and humanistic organizations were $12.3 billion, accounting for 4% of all charitable donations. Charitable donations given directly to individuals were $3.5 billion, accounting for 1% of all charitable donations. In 2009, the total amount of charitable donations by Americans to public services was $27 billion, accounting for 9% of all charitable donations. Donations for international aid were $8.8 billion, accounting for 3% of all charitable donations. Environmental protection donations were $6.1 billion, accounting for 2% of all charitable donations. Donations in other areas were $28.5 billion, accounting for 10% of all charitable donations.
Why do Americans make charitable donations?
In 2009, the Giving USA Foundation and the Indiana University Center on Philanthropy conducted a special survey on the motivations for American charitable donations. According to the research report, although there are many motivations for people to make charitable donations, caring for others and caring for the world are the primary motivations for Americans. Among individual charitable donations in the United States, 17.8% of people cited helping others meet their most basic living needs as their primary motivation, 16.6% cited making the world a better place, 12.5% cited making their community a better place, 11.5% cited helping the poor, 11.0% cited achieving social justice, 7% cited having control over how their money is handled, and 5.3% cited solving world problems as their primary motivation.
The motivations for charitable donations also differ among people with different income levels and educational backgrounds in the United States. For high-income groups with an annual income of over $100,000, their motivations for charitable giving are more focused on community and global issues. For low-to-middle-income groups with an annual income of less than $50,000, their motivations for charitable giving are more focused on the lives of the poor, and they strive to improve the lives of the poor through their donations. Similarly, for donors with an education level below high school, their main motivation for donating is also to help and improve the lives of the poor. For donors with a college education or higher, their main motivations are more concentrated on community development and social justice. Among middle-income donors in the United States with an annual income between $50,000 and $100,000, their average annual charitable donation is $1,929, which is much higher than the average for individual donations in the United States. Among these middle-income donors, social justice is their primary motivation for donating. Among high-income donors, the proportion of people who donate for social justice is 34%, while among low-income donors, the proportion of people who donate in pursuit of social justice is 26%.
What are the differences in charitable donations between China and the United States?
According to a research report on charitable donations in China and the United States, the national conditions of the two countries are different, leading to significant differences. First, the amount of charitable donations in the United States is large. Since 2000, the annual amount of charitable donations in the United States has exceeded $20 billion, and it broke through $30 billion in 2007. In 2007, the total amount of charitable donations in Chinese society was 22.3 billion RMB, which was nearly $3.1 billion at the exchange rate at that time. Compared to the United States, the amount of charitable donations in the United States that year was 98 times that of China's total charitable donations. In 2007, U.S. charitable donations accounted for 2.21% of GDP, while China's charitable donations accounted for 0.09% of GDP. There are about 1 million charitable organizations in the United States, mainly private charitable organizations. In contrast, there are about 300 charitable organizations in China, and most of them are led by government agencies.
The structure of charitable donations in China and the United States is different. The main source of charitable donations in the United States is individuals, with individual charitable donations accounting for more than 75% of all charitable donations, while corporate charitable donations account for only about 5%. In China, individual charitable donations generally account for 20% of the total, while corporate and group donations make up the majority of China's charitable donations. There are also significant differences in the use of charitable donations between the two countries. Most U.S. charitable donations are used for churches, education, medical health, and public services, while China's charitable donations focus on relief and disaster assistance, such as building schoolhouses in poverty-stricken areas and providing aid to victims of major natural disasters.
The donation cultures of China and the United States are different. Ancient Chinese culture advocated the joy of giving, but this philanthropic culture was mostly reflected in individual behavior and did not form a social culture. In the past, doing good deeds was seen as the wealthy accumulating merit; now, donating is seen as the wealthy giving back to society, which seems to have little to do with ordinary people. It cannot be denied that China's per capita income is still at the level of a low-income country in the world, so compared with the United States, individuals, especially ordinary people, face financial constraints when making charitable donations. While there is no shortage of wealthy people in China who are enthusiastic about charitable donations, in general, there is a lot of passive donation behavior among the wealthy, and a philanthropic culture of giving back to society has not yet been formed.
In American society, charitable donation is regarded as a citizen's responsibility and embodies a culture. In American financial education, one point is essential when parents teach their children about personal finance: they must take a portion of their savings for charitable donations. There is a famous 60/40 rule in American financial management, which means 60% of income is used for living expenses, 40% is used for savings and investment, and within that 40%, 10% should be set aside for charitable donations. Nearly 90% of American families make some form of charitable donation every year. For billionaires like Gates and Buffett, not only are they donating most of their own wealth, but they have also sparked a new round of philanthropic movements among the wealthy in the United States, which is undoubtedly opening another door for Chinese billionaires to view wealth.
Frugal housewife donates a large sum of money to charity
In the United States, charitable donation is not the patent of the wealthy. People with ordinary incomes can also donate large sums of money if they have the heart. Below are two stories of ordinary people making charitable donations, which may give people some food for thought. The 98-year-old woman, Oliver, from Long Beach, Washington, left two deep impressions on people during her lifetime: first, she was a woman full of passion for life; second, she was a frugal woman. But no one knew that Oliver was also a smart investor. When she passed away, she left an estate of $4.5 million, and all of this estate was used to serve the local community, including building a large swimming pool for the community and establishing scholarships and educational funds for local primary and secondary school teachers. Before she passed away, Oliver left a will stating that no funeral should be held after her death, and she did not even need an obituary published; she just wanted to leave this world quietly alone.
Oliver was just an ordinary store clerk. Before the age of 70, she relied on hourly wages from selling fish in a store to make a living. Even at the age of 90, she was still self-reliant, and even the firewood for the fireplace during Christmas was chopped by herself. Oliver did not receive a college education, but she was a very intelligent woman. She used her savings for investment, and the return on investment was often as high as 50% or more. In terms of life, Oliver was indeed a frugal woman. In her life, she never went to a barbershop to get a haircut, but cut her own hair. She never bought new shoelaces, but tore old clothes into strips to use as shoelaces. When her old friend bought her a new coat during a store clearance sale, Oliver immediately returned the clothes and then spent $2 on a coat. Oliver once said that if there are good clothes in a second-hand store, there is no need to go to a clothing store to buy new ones. Therefore, the vast majority of the clothes Oliver wore in her life were bought in second-hand stores.
There is another story of a frugal housewife in the United States. Vala was a single woman who had never been married and had no children. When she passed away at the age of 90, she left $2.8 million in financial assets, and all these assets were donated to the community, benefiting thousands of local people. After graduating from high school, Vala went to work as a clerk at the U.S. Department of Labor. After her father passed away, Vala took on all the living expenses for her unemployed mother. After working for 32 years in a U.S. federal government agency, Vala lived a retired life. She used the money she saved while working for various financial investments, while she herself continued to live a frugal life. Vala had a goal: she wanted to use the money she saved to earn more money and use it to help the poor after her death. In Vala's mind, frugality is a virtue, and she spent her life in frugality.
