Business

How much should you give?

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Ethicist Peter Singer has an interesting article in the New York Times magazine on charitable giving. It’s largely a discussion of “how much should one give?” and makes the argument that it is perfectly defensible, on moral grounds, to tax the rich more heavily than the poor and to expect them to donate more.

I’ve been looking for an article like this for some time. I’m nearing 40, and my wife went back to work this year. So we’re starting to hit that point in midlife where our discretionary income is high enough to make serious charitable giving a possibility. Up until now our monetary donations have been small and irregular — several hundred dollars a year, generally. Most of our charity has been about deeds: donating blood, helping neighbors, sending our excess belongings to nonprofits rather than throwing them out or holding a garage sale.

But now we’re starting to think about charity in a more organized way, and Singer’s article offered some thought-provoking ways to think about it.

Some of his more interesting observations:

1. Of the top four charitable givers in United States history, three were/are atheists or agnostic: Bill Gates, Warren Buffett and Andrew Carnegie (John D. Rockefeller, the fourth member of the group, was a Baptist). Further, Buffett’s charitable pledges — about $37 billion — more than double that of Carnegie and Rockefeller put together — after accounting for inflation. Bill Gates’ donations are nearly as large: about $30 billion.

That says nothing, of course, about whether believers or nonbelievers as a group are more generous. But it’s food for thought, as well as demonstrating the scale of modern philanthropy.

2. A lot of people argue that the rich owe much of their wealth to the society that helps them create it, but I’ve never seen the argument laid out in detail. Singer does. He cites Nobel-winning economist Herbert Simon, who estimates that social capital — the prevailing social, governmental and economic conditions — accounts for about 90 percent of what people earn in wealthy societies like ours. “On moral grounds,” Simon adds, “we could argue for a flat income tax of 90 percent.” Simon notes that that would be economically disastrous, but there’s nothing unethical with taxing more heavily those who can most afford to pay.

Warren Buffett explicitly agrees with that logic. “If you stick me down in the middle of Bangladesh or Peru,â€Â? he said, “you’ll find out how much this talent is going to produce in the wrong kind of soil.â€Â?

(continued over at Midtopia)