Donating money can be a very personal decision. There are no ‘right’ or ‘wrong’ amounts, and to most people, anything more than 0% seems to be good enough. So the question arises: how much does the average person donate to charity?
According to several large foundations, the average percentage of disposable income a person donates is usually under 5% of their total income.
This could be for various reasons, including religion, altruism, social responsibility, and in some cases, even publicity.
Who Gives the Money?
There are three different types of entities that donate: individuals, foundations, and corporations.
By far, individuals tend to donate the most – nearly $3 billion in 2017! Of every five dollars donated to charity, individuals account for four of them. Of course, charitable donations vary tremendously among income brackets. It was found that many people use their tax payments as a basis for whether or not they feel like they are giving enough.
The poor, for example, may not give much in taxes, but research showed that households with income levels of less than $20,000 gave about 4.6% to charity – which is higher than any other income group. Households between $50,000 and $100,000 donated about 2.5% or less, and only in higher income levels, above $100,000, did this percentage rise again.
On the other hand, government leaders and the super-rich also donate hefty amounts to charity. Joe Biden, for example, donated 1.44% of his $333,182 salary in 2009, and Barack Obama donated $1.4 million of his Nobel Peace Prize to different charities – about 25%. Warren Buffet pledged 85% of his entire fortune to the Bill & Melinda Gates Foundation.
The growth in giving is driven mostly by larger donations from fewer people. In 2015, about 1% of households accounted for almost half of the total donations. On average, Americans donate about 2.1% of their disposable income.
Foundations are the second biggest source of charitable giving, making up 16% of total giving in 2017. Foundation giving has more than doubled over the generation – in 1989, they accounted for only 7% of total giving.
This big increase is in part, reflective of the increase in economic inequality. Many more extremely wealthy people can now set up their own foundations, or make gifts to those that already exist.
Corporations gave about $20.8 billion in 2017, which makes up about 1% of overall pretax profit, including donations of cash and products. The average corporation gives about 0.8% of profit, which is considerably less than the 2.1% donated by individuals.
Who Gets the Money?
Most donations go to large organizations. Since they spend more, they have more of a case for support. That is, it takes money to raise money.
Religious organizations receive about 1 of every 3 dollars donated, while education gets the second-largest amount – about 3 of every 4 dollars going to 4-year colleges and universities. Human services, health organizations, and public-sector benefit organizations are also on the list, while international affairs, arts and cultural organizations and environmental and animal organizations are further down.
All these figures are estimates based on data gathered by other organizations. Data is not released until at least 2 years after donations are made, so these figures are adjusted and may not be exact. But they give a pretty good picture of what the donation landscape looks like!