How much should we give to charity

Tricky tricky moral, financial and practical question.

To answer it we thought we’d start by laying out how much Americans currently give to charity.

According to the Lily Family School of Philanthropy’s seminal 2019 report on philanthropy in America titled “Changes to the Giving Landscape”, the average American household has been giving around 2.19% of their annual income (or $1,529) to charity each year since the Great Recession.

How do we feel about this number? Wow that’s high? Whoa that’s low? Are you doing the mental math to see how your household matches up?

Not that we’re encouraging any comparing but to properly frame this statistic it might help to break down it by demographic, which the report does. So, how much do Americans give….

By Generation:

Millennial - 0.90%

Gen X - 1.26%

Boomer - 2.16%

Silent - 3.92%

Great - 8.80%

By Gender/Marital Status:

Single Men - 1.51%

Single Women - 2.40%

Married - 2.50%

By Education Level:

Less than High School - 1.04%

High School - 2.07%

Some College -2.11%

College Degree - 2.52%

Graduate Degree - 3.21%

By Income (3 year average):

<$50,000 - 2.13%

$50,001 - $99,999 - 2.13%

$100,000+ - 2.37%

By (US) Region:

North Central - 2.08%

North East - 2.19%

South - 2.25%

West - 2.25%

All numbers taken from Lily Family School of Philanthropy, “Changes to the Giving Landscape”, 2019, pages 13-14. and reflect giving post-Great Recession.

Now how are we feeling? Are you a Southerner gloating over penny pinching Yankees? Are you a “Boomer” tisk tisking the paltry giving habits of Millennials? A woman sighing at the fact that one of the statistics you’re leading in is based on putting yourself over others?

Well not so fast because unsurprisingly there is a lot of nuance in interpreting these numbers. For example, Southerners may give a higher % of income but a higher % of North Easterners give. Millennials may give less but they volunteer more. And single women? Actually there’s no nuance to that last example, women just give more even though they tend to earn less…sigh.

Nuance aside, these numbers might give us a solid idea of how our giving compares to our applicable “average”. But who wants to make decisions based on being average…

Our humble recommendation for deciding how much to give is to follow a few basic principles:

1. It’s ok to be wealthy, so long as you achieve that wealth through legal and moral means.

2. Be aware of how much money you really need to live a decent life. This will vary greatly by circumstance but you can find what the livable income is for your particular state as a general guideline.

3. Assuming you are earning a livable wage, give at least 10% of what you’re spending on discretionary expenses, i.e. the amount you’re spending on things you don’t “need”.

For the average American household spending 26.6% on discretionary expenses, this would mean donating 2.6% of your annual income to charity - slightly above the current average.

Ultimately, how much you give will need to be based on an intensely personal calculus that our haughty principles might not help with at all.

We’ll leave you with a potentially easier rule of thumb to follow which is to give until it hurts (a little).