The Truly Rich Get a Free Pass in New Study of ‘Wealthy’ Donors

To the Editor:

A recent study by Bank of America and the Indiana University Lilly Family School of Philanthropy generated headlines like this one in the Chronicle of Philanthropy — “90% of Wealthy Households Gave to Charity Last Year.”

While it is true that Americans are a generous lot, unfortunately this study and the resulting coverage miss some critical distinctions. The report self-describes as being about the “wealthy,” but what does that actually mean? In this case, the researchers looked at households with incomes of $200,000 or more or a net worth of $1 million or more. These families are certainly affluent, but there is an enormous difference between households making $200,000 and those earning more than $2 million. Lumping them all together skews the findings and prevents meaningful analysis.

Here’s what it comes down to: In the Bank of America/Lilly Family School study, the affluent make the ultra-rich look good even though they continue to hoard, not share, their wealth. Just during the course of the pandemic, billionaires added more than $1 trillion to their wealth. Yet even in the face of an unprecedented crisis, the extremely well off — with the notable exception of MacKenzie Scott — have only given a tiny proportion of their money to nonprofits. Analyzing billionaires and the merely affluent through the same lens lets ultra-wealthy individuals off the hook for their dismal levels of giving.

This leads to another problem with the report: It doesn’t provide concrete information on the actual size of the donations. The 90 percent figure touted in headlines is based on the binary of “giving” versus “not giving,” and other analysis in the report uses relative measures, such as “increased giving.” Are we talking about hundreds of dollars? Thousands? Millions? A $50 or $100 increase in giving isn’t worthy of praise if it comes from a billionaire.

We need to move beyond congratulatory pats on the back for the very low bar of simply giving and create a higher standard based upon quantifiable measurements, such as percentage of wealth. That’s the aim of my initiative, the Crisis Charitable Commitment, which calls on America’s wealthiest individuals and foundations to commit to a minimum level of charitable contributions as a percentage of their assets.

To be valuable, reports like this need to break down data into narrower income brackets and include concrete numbers on the amount of dollars actually donated in relation to a person’s overall wealth. Only then can we analyze whether the wealthy, and particularly the ultra-wealthy, are giving their fair share. In the meantime, reports like this provide great public relations for the uber-rich while obscuring a disappointing truth: Even during the pandemic, billionaires made token donations and hoarded the bulk of their wealth.

Alan S. Davis
Founder
The Crisis Charitable Commitment