Giving to the Poor

According to an Indiana University Center on Philanthropy study commissioned by Google, less than 1/3 of all charitable giving is directed toward the poor and others in need. In 2005 less than $78-billion of the $250-billion donated to charity explicitly helped the economically disadvantaged...

Examining the recipients of charitable giving, the study found that of the more than $250 billion in charitable giving in 2005, less than $78 billion targeted those in need. Just 8 percent of all donations provided food, shelter and other basic necessities, while another 23 percent provided services such as medical treatment, educational opportunities, job training initiatives and similar programs.

The study, initial results of which were published in an opinion piece in The Wall Street Journal (“The Charity Gap,” April 4, 2007; paid registration required), noted that the trend is strong even among the wealthy. For donors earning more than $1 million per year, just 4 percent of their overall giving went to cover basic needs and 19 percent to other programs for the poor.

Only 8 percent of American giving supports international causes of any kind, according to the study.

Why the Gap?

The study puts forth two reasons to explain the disparity between what most donors often say they want to give to and what their contributions actually support.

First, donors often find it much more difficult to say no to local community causes or to requests and solicitations from friends and colleagues. Donors also may feel more secure that contributions to local causes will be used more effectively and that they can judge better how the funds are being used.

Second, many donors don’t completely understand what their contributions support, especially for religious giving. While giving to religious causes is the most popular choice for contributions, the study reports that less than 20 cents of every dollar given to religious organizations fund programs for the poor and economically disadvantaged. Similarly, while healthcare and education are popular causes as well, just 10 cents per dollar is targeted on health programs for the needy and less than 9 cents per dollar is used on scholarships.

The Wall Street Journal opinion piece was written by Sheryl Sandberg, vice president of global online sales and operations for Google Inc. and a member of the board for Google.org, the philanthropic arm of Google Inc.

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