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Headline News
Most giving doesn't aid poor
By HARVY LIPMAN
STAFF WRITER
Most charitable
giving doesn't go to charity, at least when the term is defined as helping the
disadvantaged. That's the
conclusion of a new study by the Center on Philanthropy at Indiana
University -- which determined
that less than one-third of the donations Americans give to non-profit groups
actually benefit the poor.
Researchers
found that about $19 billion worth of individual giving in 2005 went directly
to organizations that help the underprivileged meet their basic living needs.
Institutions like hospitals and universities spent an additional $58.3 billion
of donated money to help the poor, through free medical care or college
scholarships, for example.
But the rest of
the $250 billion individuals gave to non-profits that year went for activities
that don't directly benefit the neediest Americans. The biggest chunk of that
was given to religious organizations to pay for congregational operating
expenses. Private schools, universities, hospitals and arts organizations
received most of the remainder.
"When
people think about charity, the first thought that comes to their minds is, How
does this help people who are less advantaged?" said Patrick Rooney, the
center's director of research. "People might be surprised to learn that a
relatively small share of total giving goes toward that end."
Rooney thinks
the center's findings -- the result of a research project funded by Google --
raise questions about what type of giving we as a society want to encourage
through the tax laws.
Indeed, some
key members of Congress have lately been questioning whether non-profits
should demonstrate that they provide at least some service to the poor in order
to qualify for their federal tax exemptions.
But the Indiana study says less about
the institutions that receive philanthropic donations than about the
individuals who give them.
The center not
only found that a relatively small percentage of giving goes to help the poor,
but that the wealthier someone is, the less likely he or she is to target his
charity to the needy.
Families with
annual household incomes of $200,000 or less on average gave 36 percent of
their donations to groups that help the poor. For those with incomes between
$200,000 and $1 million, the percentage fell to 29 percent. Those in the
wealthiest households -- earning $1 million or more -- gave just 22 percent of
their donations to help the disadvantaged.
"There's a
desire to see and touch where their gift is being used," said Tom Toronto,
president of Bergen County's United Way in Paramus. "The outcomes at
health and human-service organizations are not as distinct as when you can see
your name on a building at a university or a wing of a museum."
Rooney
acknowledged that the study's numbers "are much squishier than we would
prefer" because of the difficulty in evaluating how much the poor benefit
from philanthropic pursuits like medical research, cultural programs for city
schools or academic studies on public policy issues. He said the center hopes
to be able to follow up with case studies of particular institutions to see if
more giving spills over into programs that help the needy. But he added that,
given the available data on giving, the Indiana findings represent an accurate portrait of
individual charity.
The
university's Center on Philanthropy is the nation's leading academic research
institution on non-profits, and Rooney has been its chief of research for more
than a decade.
"I think
people will be surprised at the relatively small share of total giving that
charity represents," Rooney said.
E-mail:
lipman@northjersey.com
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