Young Multimillionaires Are Stingier Than Older Ones, Study Finds

Older wealthy people give a far bigger share of their assets to charity than their younger counterparts, according to a study by NewTithing Group, a San Francisco nonprofit organization that

encourages people to give more to charity.

Using unpublished Internal Revenue Service data from 2003, the study analyzed giving based not just on donors’ earnings but also on their investment assets, which for wealthy people generally exceed their earned income, according to the report.

People older than 65 with $10-million or more in income donated 1.54 percent of their investment assets to charity, while people younger than 35 who had that much in income donated 0.4 percent of their investment assets, on average, the study found.

Younger people of more modest means tended to give a greater share of their assets to charity. For instance, people with incomes of $75,000 to $99,999 donated 1.8 percent of their assets.

According to the report, 130.4 million taxpayers gave a total of $148.4-billion to charity in 2003.

Of that total, the 6,126 people with investment assets of $10-million or more gave 7.2 percent.

Of those wealthiest donors, the 1,484 people who were 65 and older gave 3.3 percent of all money donated by taxpayers; the 2,361 in the 51-to-64 age range donated 2.14 percent; the 1,996 who were age 36 to 50 contributed 1.68 percent; and the 285 who were 35 and under gave 0.08 percent.

NewTithing produced the study in part to bolster its argument that wealthy people can afford to give more, and that the best way to measure generosity is to look at the investment assets a person has on hand rather than simply looking at how much he or she makes each year.

For example, it says that people younger than 35 who earn $10-million or more have an average of $102-million in investment assets available, while those 65 and older have an average of $214-million in investment assets.

When giving is measured the traditional way — by percentage of salary and noninvestment income — then wealthy people look far more generous. People under 35 with $10-million in income gave 7 percent of their salary and noninvestment income to charity in 2003, compared with the 0.4 percent of their investment assets, for example.

The NewTithing report says that if wealthy young and middle-aged people gave a percentage of their investment assets to charity that was similar to the share given by their less-affluent peers, then at least $25-billion more would have gone to charity in 2003, an increase of 17 percent.

NewTithing calculated how much donors should be able to give without a change in their way of life, basing its calculations not just on income and assets but also on fluctuations in those assets from year to year, anticipated expenditures, and tax savings from charitable gifts. When figuring assets, the group did not include people’s homes, possessions, retirement pensions, or trusts.

Among the other findings:

• People who earn $10-million or more and had no dependents were more generous than their peers who did have dependents.

  The 3,353 wealthiest taxpayers without dependents gave 4.74 percent of all money contributed to charity in 2003. The 1,002 super-rich filers with three or more dependents gave 1.05 percent of all money given that year; the 1,079 with two dependents gave 0.86 percent; and the 692 taxpayers with one dependent gave 0.56 percent.

• Among the wealthiest taxpayers studied, the 655 single men donated 3.42 percent of all money given to charity and the 247 single women gave 1.78 percent.
• In nearly every income category, single women and single men were equally generous when their gifts were calculated as a share of assets. Though single women earned lower salaries than single men, their assets were higher. Thus, when calculated as a share of their earned income, single women were more generous than single men.

A copy of the report on the study, “The Demographics of Charitable Giving,” as well as an education booklet for donors based on the research, “Beyond Taxes: Secrets to Fulfilling Philanthropy,” are available free on the organization’s Web site, http://www.newtithing.org. Paper copies are available for $10 each from John Sanna & Associates/NewTithing Group, 134 Adrian Avenue, South San Francisco, Calif. 94080-1006; (650) 731-6898; jcsannaassoc@msn.com.

GIVING AS A PERCENTAGE OF INCOME: HOW OLDER AND YOUNGER PEOPLE DIFFER