Americans are "stingy." This was the accusation hurled at the U.S. almost exactly one year ago today by Jan Egeland, United Nations Undersecretary for Humanitarian Affairs, immediately after the Asian tsunami disaster.
Even by U.N. standards, it was a particularly absurd anti-American slur--although it no doubt expresses the view of many foreign elites, who have come to believe that government is the only true source of goodness and charity. In the weeks and months that followed the tsunami, American citizens dug deep into their wallets, donating some $1.78 billion to the relief effort in Asia--dwarfing the contributions of other developed nations. Since October Americans have also contributed $78 million to assist the casualties of the Pakistan earthquake.
What impels Americans to engage in such kindness to strangers? We suspect that Americans give to private charities because they recognize that these initiatives work best. Bobby Jindal, a Congressman from New Orleans whose own home was badly damaged by flood waters, tells us that "by far the most effective relief efforts have come from private charitable aid organizations. FEMA and other state/local government agencies set up bureaucracies and red tape, while private businesses and charities moved in swiftly to alleviate the human suffering on the ground."
Mr. Jindal tells the story of an elderly woman who dropped off a white envelope at a county sheriff's office in Louisiana filled with eight single dollar bills and a note of apology saying that this was all she could afford to give. Another woman wrote a quarter-million-dollar relief check with only one stipulation: that her generous act remain anonymous.
There is a mythology in the philanthropic world that Americans are motivated to give by the somewhat selfish pursuit of a tax deduction. But a surprisingly large percentage of charitable gifts aren't even itemized on tax forms. Moreover, the Tax Foundation has provided compelling evidence that over the past 50 years--as tax rates on the highest earners have fluctuated from a high of 90% to a low of 28%--American giving has hardly deviated from 2% of personal income. In the 1980s, as tax-rate reductions reduced the value of the charitable tax deduction by about half, the level of charitable giving nearly doubled. This suggests that charitable giving would continue to flourish under a flat-rate tax system with no deduction.
But yes, it's true, that when it comes to funding self-serving bureaucracies that don't produce results--such as much of the U.N. and most other multi-government foreign-aid schemes--Americans are skeptics. For good reason. Study after study has documented that there is no correlation between the amount of foreign assistance a nation receives and its subsequent rate of economic development. Think Africa, which has received hundreds of billions of dollars in aid to little positive effect. This suggests that the optimal amount of U.S. government development aid may be zero.
But at the same time, when it comes to private Good Samaritan undertakings that do alleviate poverty and despair, Americans are second to none, giving three to four times the amount of "official" foreign aid, according to Ian Vasquez of the Cato Institute's Global Liberty Project. That's not stingy. It's smart.
Why do Americans give? I would be largely because our Christian heritage demands it of us. We have an obligation to help those less fortunate, so we do.