Monday, January 11, 2010

Fraser Study Finds Huge Generosity Gap: Americans Are 2-3 Times More Generous Than Canadians

From the Fraser Institutes's study "Generosity in Canada and the United States: The 2009 Generosity Index":

The Generosity Index measures private monetary generosity using two indicators: the percentage of tax filers who donated to charities (i.e., the extent of generosity), and the percentage of aggregate personal income donated to charity (i.e., the depth of generosity). A higher percentage of tax filers donated to charity in the United States (26.6%) than in Canada (24.0%) during the 2007 tax year.

Similarly, in 2007, Americans gave 1.60% of their aggregate income to charity, with donations totalling US$190 billion (United States Internal Revenue Service, 2009a; Bureau of Economic Analysis, 2009), see chart above. This rate of giving is more than double that of Canadians, who gave 0.73% of aggregate income (CA$8.5 billion in total) to charity in 2007 (Canada Revenue Agency, 2009; Statistics Canada, 2009). If Canadians had given the same percent age of their aggregate income to charity as Americans had, Canada’s charities would have received an additional $10.1 billion in private donations.

Canada makes its poorest showing in the average value of charitable donations in local currency. The average US donation was US$4,623 (United States Internal Revenue Service, 2009) — three times more than the average Canadian donation of CA$1,504 (Canada Revenue Agency, 2009a). Wyoming, the top-ranked jurisdiction on this measure, recorded an average charitable donation of US$11,011 — almost five times more than the average donation of CA$2,298 in Alberta, Canada’s top-performing province on this measure. Even in Rhode Island, the lowest-ranked US state, the average donation (US$2,810) is over $500 more than the average donation in Alberta. The disparity is more pronounced when currency differences are accounted for.


Update: Vice-President Joe Biden gave an average of
$300 per year in charity between 1998-2006, on average annual income during those years of $236,000. In percentage terms, the Bidens gave about 1/8 of 1% of their income to charity, far below the 1.6% average for Americans, demonstrating his support of "Change You Can Believe In, As Long As You're Using Someone Else's Money, And Not Your Own."


At 1/11/2010 10:40 AM, Blogger Colin said...

Another great post. However, Canada shouldn't feel too much shame in being second best to the most generous country in the world:

This, by the way, also destroys the slander that capitalism and a culture/government based on the primacy of the individual is incompatible with generosity and compassion for one's fellow man.

I suspect that Canadians and others view their taxes as a charitable contribution and see less reason for further such donations. The more government takes up the task of charity, the more disengaged citizens become in helping to address social ills.

At 1/11/2010 11:27 AM, Anonymous morganovich said...

i'd be interested to see this analysis done as a % of after tax disposable income. might some of this differential have to do with tax rates and discretionary spending differences?

might there also be a wealth effect here? does giving increase disproportionately after a certain income level? (once you have comfortably accounted for your basic needs?)

At 1/11/2010 11:28 AM, Blogger Michael said...

About 3/4 of Americans or Canadians give nothing according to this study. How proud should those 75% of Americans be that the 25% of Americans who do give may give more than the 25% of Canadians who do give?

I wonder how skewed this is by tax law and differences between Canada and US. In US, 1040EZ and 1040A filers don't list charitable contributions. The interesting (to me) number would be, how do Canadian and American at equal income levels compare?

At 1/11/2010 11:30 AM, Anonymous American Delight said...

We'll never convince the world about our charity/generosity, no matter how many facts/figures you present them with.

I've heard how routinely stunned French tourists are when they come to America and see that we demonstrate charity--that we are not a cold, remorseless country toward the impoverished.

At 1/11/2010 12:57 PM, Blogger misterjosh said...

I want to take this at face value, but I have some questions that aren't answered in the document linked:

Are charitable contributions tax deductible in Canada?

Are donations to churches considered charitable contributions? If so - that could skew things somewhat. Many churches do not include charity as part of their mission.

I gotta say - this makes me feel like a curmudgeonly bastard. Only donating 0.6% of my income to charity.

At 1/11/2010 1:04 PM, Anonymous Anonymous said...

@ Misterjosh,

yes, charitable contributions in Canada are tax deductible.

@ colin,

yes, many Canadians feel that their taxes are like a charitable contribution. after all, I give up about 46% of each dollar I make. seems pretty generous to me.

At 1/11/2010 1:15 PM, Blogger Colin said...

Let's also remember that conservatives are more generous than lefties:

At 1/11/2010 3:07 PM, Blogger Dean_L said...

Canadians have a much lower tax deduction for making charitable donations than do Americans. In Canada the deduction is 29% of the donation (over $200) versus 50%(?) inthe U.S.

It's not so much a wealth effect as it is the fact in Canada there is little government incentive to give away more of your disposable income, especially after paying higher marginal taxes than Americans in the first place (if you take into account the limited number of other eligible deductions versus in the United States).

At 1/11/2010 4:57 PM, Anonymous Stephen said...

Two questions,

First, do Canadians get the same tax write-off that Americans get?

Second, it looks like tax return data was used to make this determination. This would exclude all those who take the standard deduction (which tends to be lower income individuals). Was this therefore really apples to apples data?

At 1/12/2010 7:38 AM, Blogger juandos said...

"How proud should those 75% of Americans be that the 25% of Americans who do give may give more than the 25% of Canadians who do give?"...

That 75% should be proud of the fact that they're NOT wasting their disposable income on charity since their tax rates are excessive...

Consider the extorted tax dollars wasted on charity for 2009 already...


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