Donations to charities have hovered at around 2 percent of America’s gross domestic product for decades. To increase last year’s $316-billion total giving by 1 percentage point, charities would have had to raise an extra $158-billion.
Below are some ideas to boost donations as well as estimates of how much they extra they could provide to charities.
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The Starbucks Solution
Patrick Rooney, a top official at the Indiana University Lilly Family School of Philanthropy, says he has calculated that giving by individuals would roughly double if every household reallocated $5 a day that it now spends on Starbucks drinks or other “superfluous consumption.” Here’s the math:
What individuals gave in 2012: $228.9-billion
Number of American households in 2012: 121 million
Extra dollars: $1,825 per household or $220.8-billion
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The 5-Percent Solution
Independent Sector, a coalition of nonprofits and foundations, led a major campaign in the 1990s called Give Five, encouraging Americans to give 5 percent of their gross income to charity. If the campaign had been successful, individual giving would have looked like this last year:
What individuals gave in 2012: $228.9-billion
Total U.S. personal income: $13.7-trillion
Giving under the 5-percent solution: $685-billion
Extra dollars: $456.1-billion
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The 1-Percent Solution
The One Percent Club in Minnesota urges wealthy people to donate each year 1 percent of their net worth or 5 percent of their income, whichever is greater. While that effort is generally aimed at people with a lot of investment assets, if all Americans had donated 1-percent of their net worth, their giving would have looked like this in 2011*:
What individuals gave in 2011: $220.3-billion
Aggregate U.S. household net worth: $40.2-trillion
Giving under the 1-percent solution: $402-billion
Extra dollars: $181.7-billion
*The most recent year for which U.S. Census Bureau figures on aggregate household net worth are available.
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Denise Applewhite/Princeton University
The Peter Singer Solution
Peter Singer, a professor of bioethics at Princeton University, says the percentage of income that people give should rise along with earnings. Those making $10-million or more should give at least 23.5 percent, according to an online calculator he has developed, while those with higher incomes should give bigger percentages. Here’s how giving would have looked in 2010 if the highest earners had donated at least 25 percent of their incomes:
What taxpayers earning $10-million or more gave in 2010*: $20-billion, or 5.8 percent
Their total adjusted gross income: $345.7-billion
Giving under the Peter Singer Solution: $86.4-billion
Extra dollars: $66.4-billion
*The most recent figures from the Internal Revenue Service for taxpayers who itemize deductions.
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Courtesy of Target
The Corporate Solution
The Minnesota Keystone Club urges local companies to give 2 percent to 5 percent of their pre-tax profits to charity, some of which can include volunteering time. Corporate giving would have looked like this if all U.S. companies had donated 2 percent of their pre-tax profits in cash:
What corporations gave in 2012: $18-billion
Pre-tax U.S. corporate profits in 2012: $2-trillion
Giving under the corporate solution: $40-billion
Extra dollars: $22-billion
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