Why Do Wealthier People Give Less to Religious Organizations?

The Congressional Budget Office just released a report about the “Options for Changing the Tax Treatment of Charitable Giving” (PDF). (Bored already? Give it a second…)

Here’s one of the takeaways from the report, as reported at Christianity Today:

… proposed changes to the tax code could reduce charitable contributions. However, the CBO does not expect religious organizations to be affected because religious donors are less sensitive to the tax benefits of contributions. Instead, it is the charities favored by the rich — the arts, education, and healthcare — that are more likely to see lowered donations.

Say what?

This chart from the report offers a little more detail:

Here’s what you need to take away from that:

It turns out that people making under $100,000 a year give 67% of their donations to religious organizations. Meanwhile, for people making over $1,000,000 a year, that number drops to 17%. There’s a steady drop in between those amounts, too.

(It’s worth pointing out that wealthier people may still give more money to religious organizations overall, but their percentage of donations toward religious groups goes down the more they make.)

CT offers an easier-to-interpret graph:

I’ll throw it to all of you: Why is this the case?

Why do wealthier people give a smaller segment of their donations to religious groups? Do they simply have more options? Do they care less about religion? Do they have other priorities? Something else entirely?

Kevin S.

Their lives tend to be less shitty, so they aren’t as likely to look forward to reward in another? Dunno, just spitballing.

Or it could be that everybody prioritizes religious giving more, but rich people can afford to go to their lower options.
Anon

Just goes to show that religion is for controlling the poor masses.
Michelle

Has anyone asked them? I could guess, but it would be just that. Maybe they see it as getting a more direct benefit for what they give, for example, supporting education gives them the opportunity to have a better educated public from which they may draw future employees. They could also see these areas as run more efficiently than religions groups. Maybe there are just fewer religious people up the income scale. Has there been further research done to find out more about the why or is more being done?
dwasifar

My hypothesis is that it’s for the same reason that most lottery tickets are sold to the same group – because religious tithes, like lotteries, are a tax on the stupid. This means people who can’t identify a sucker deal when they see it.

If you’d like it in the language of statistics: Wealth and intelligence generally correlate positively, and religiosity and intelligence generally correlate negatively. Thus, the wealthier you are, the less likely you are to be suckered into giving your money to religion. Your charitable impulses are more likely to be directed toward things with visible results – and that’s exactly what this data is showing us.

I know this is sort of politically incorrect, but the hypothesis does fit the data.

By the way, my preferred charity is Smile Train, providing free cleft palate surgery for impoverished children worldwide to help them have normal lives. Virtually all donations go to program, not to further fundraising.
Johnny the Great

I believe I know why this is so. Let me sum it up this way: When was the last time you heard of a blue-collar worker donating a half a million dollars to the college he graduated from and his son is applying to? This act would be a tax write-off as a charitable contribution to arts and education. It wouldn’t affect the amount they toss in the collection plate on Sunday though.
MH

I like Smile Train as well.
Claudia

There could be a couple of factors at work.

There is significant data to suggest that poverty correlates with religiosity. Without getting into the cause of this (lower education levels, more anxiety etc.) if the correlation remains strong amongst the very wealthy, it’s likely that these would be proportionately less religious, and hence less likely to give to religious organizations.

Another factor who millionaires are and where their money comes from. I don’t have any idea about this but it could certainly affect results. For instance, if a significantly high peopoetion of millionairs were Wall Street types who were the smartest Math major at college, it wouldn’t be at all surprising that this group would be enriched in the nonreligious. However for that you need a proper breakdown of the origins of each income groups money, especially self-made vs. family money.

@dwasifar I would partially agree but I’d be very careful about how one talks about correlations. Assuming wealth and intelligence correlate positively (and I haven’t seen that data) you must be watchful of not inferring that the correlation is linear along the entire distribution. More than wealth, I would bet education level is a better predictor of “intelligence”, since current intelligence tests are unable to really separate themselves from education. Given that, I’d want to see how substantially different the education (or measured intelligence) of someone earning 100K is to someone earning 500K or 1 Million. I’d also really want to look a generation backwards, since any effect of education or upbringing would likely happen during childhood.
Dustin Finney

My hypothesis:

Wealthier people are more likely to be better-educated, and education and income have a negative correlation to religious belief, hence less donations to religious charities among the rich. Instead, wealthier individuals, more likely to have undergone higher education and reaped its rewards, are more likely to appreciate its value, as with the arts, they are more likely to have the time and money to enjoy them than less wealthy individuals.
Susi

Because the higher up they are on the food chain, the more likely they are educated and know supporting religious organizations is a big waste of their money on the masses who choose ignorance.
Julien

People give money to things they care about, and people care about the things that are in their lives. If you look at all the areas of giving in this light, it starts to make perfect sense. For poorer folks, Church is a social circle and a network in hard times. The more money you have, the more art you immerse yourself in – poor people rarely encounter art in their day to day lives, so why would they care? Rich people have just about everything else, so research to solve the one thing they can’t guard against – sickness and death – starts to eat up more and more of their money. Basic needs, education – it all follows the trend of ‘donate to what is most important to me personally.’
ade

My guess would be that everyone who goes to church, regardless of income, throws the same few bucks into the collection plate each week. For wealthier people, this is a lower percentage of the total dollars they give to charity.
James

I have nothing to add to the conversation, but when you said “Why is this the case?”
I got a total mental image of Professor Julius Sumner Miller.
Cheryl

A religious group is not going to name a church after them. It’s an ego trip to give a lot of money to an organization that will put your name up on a building/wall/edifice for all the world to see. Being on a donors list of an organization is also good for networking with peers. Such wealthy donors will find few peers or real business connections in a religious group.
William Roentgen

Charities tend to be about addressing symptoms (“giving a man a fish”), not causes. People who are used to looking at economics from a different perspective might be more focused on self-sustaining ways to combat the world’s ills (“teach a man to fish”), which in essence means finding for-profit ways of addressing them.
William

By the way, charitably-minded agnostics and atheists should familiarize themselves with Foundation Beyond Belief, which is something like a United Way for people who don’t want to support religious charities.
Erp

For poorer folks, Church is a social circle and a network in hard times.

I think this may be a key point. The well-off in this country can afford to pay for meals when they are ill, etc.. The poor can’t, but, their church may have a group to visit the ill with meals or other support, may have a fund to help members temporarily, may have a big room/kitchen (paid for by donations over the years) that members can use for free or cheaply for a social event. Some churches fleece their sheep, but, some are run by their sheep.

BTW, It looks like the clergy housing allowance exemption is stirring a few ripples in the church world.
Annie

Also, I would imagine religious people who make less than $100,000 can only afford to give money to one place (or fewer places). The rich? They can afford to diversify. Also, the less wealthy may give to their church and think that the church is actually giving to help the needy, so they might see this as repetitive to give to the needy themselves.

We only know how much the givers make, and where they give their charitable contributions by percentage. We know nothing about what percentage of their money they donate (from these charts). That bit of information would be helpful here.
dwasifar

Claudia: “More than wealth, I would bet education level is a better predictor of “intelligence”, since current intelligence tests are unable to really separate themselves from education.”

Since education and intelligence correlate positively (how could they not, if what you say is true?), and wealth and education also correlate positively, I’m okay with that. It’s one or two more steps to get to the same point.
ThereIsNoSpoon

Religion is and has always been popular with people in hopeless situations because it offers hope of some sort of balance or justice in afterlife. Religions are competitive, and a successful strategy has been to keep their followers breeding. This continues to expand their numbers, at the same time keeping many of them poor, and thus in a hopeless situation more receptive to religion. Once you’re rich, it’s a lot easier to let go. “Rich” is relative; parts of the world with large, educated middle classes are less religious than parts with higher wealth imbalance. The US is the exception in this sense.
Mej

Educated people tend to be less religious.

Wealthy people tend to be educated.

Ergo, wealthier people tend to be less religious.
Otto

Because non-religious organizations are more effective than religious ones, and people who have more money tend to be better at spending it properly. That’s why they have more money to begin with.
Stephanie

Maybe because under 100k a year, that twenty you throw in the collection plate in order to not be seen as a freeloader by the next family over on the pew is a considerably larger proportion of your income?
Miko

The rich give less (percentage-wise) to religious organizations for the same reason that they spend a lower percentage of their income on food. Rational consumers (of products or of charity) will purchase a good so long as its marginal utility is greater than the cost. The fact that they have more money won’t necessarily affect the marginal utility of giving money to a religious organization.

Or, put more simply: suppose that the average religious person would like to give X dollars per year to their church and has a budget of Y dollars per year for charitable donations. If Y is less than X, then they’ll be unable to meet the goal, but will do the best they can by devoting a large portion of their donations to the church. Conversely, if Y is greater X, they’ll donate X to the church and use the remaining (Y-X) for other purposes. Making Y larger doesn’t affect X, and so those with higher incomes will logically spend less of it on the church.

Think of money donated to the church as the price of admission to hear a sermon. Neither the price of a ticket nor the desire to hear a sermon necessarily goes up just because they have more money.
Daniel Lafave

This isn’t a difficult question, is it? Church is a social club, but one where your membership fee is treated as a charitable donation. If we treated gym membership fees as charitable donations, then gym memberships would be a large part of donations in that income group as well, but we don’t.
Miko

Otto:

Because non-religious organizations are more effective than religious ones, and people who have more money tend to be better at spending it properly. That’s why they have more money to begin with.

Several problems here. The two most egregious:
1) This premise is only true in a free market (that is to say, no government). In a statist market, those with more money tend to be those with the best lobbyists. Since lobbyists usually advocate inefficient transfers of wealth from disperse groups to concentrated groups (if they were efficient transfers, they’d happen without government intervention; thus, the only reason to lobby for a transfer is because it’s inefficient), one could even say that, in a statist society, those who have the most money tend to be those who spend it in the least efficient way possible.
2) Even if your premise were true, it’s important to look at this from a praxeological perspective: the individual doesn’t spend money in the way that you think is most effective, but in the way that she thinks is most effective. Putting money in a church collection plate or making a donation of any other sort is often not intended to achieve a positive change but rather to signal your generosity to those who see you do it. From this perspective, the most effective donation is not the donation to the group that uses it best but the donation that most people see. And unless you’re donating in amounts that gets your name on a building, there’s a good chance that the collection plate will be seen by more people than the check you send in the mail to a secular organization.
Drakk

Wealthy people are generally wealthier as a result of being more materialistic, which seems like it would be counter to most religious belief.
Daniel Schealler

My only thoughts are that the Health, Organization and Arts donations provided by the very wealthy may consist of:

1) Higher individual payouts
2) Greater perception of prestige (from 1)
3) A better opportunity to network with other wealthy and connected people at donor functions (from 1)
Heidi

Wealth and intelligence generally correlate positively,

Which is why George W. Bush is such a rocket scientist.
Kenny

Not surprising to me in the slightest. Religion is sustained by the poor and uninsured.
Marina Pet Hospital

Right. I stack that up to celebrities being the least likely to get big paychecks due to skill or intellect.
Jude

Back in my Christian days, I was expected to give 10% of my gross income to my church (and was regularly reminded to do so 😛 ). Once that was done, there was very little left over to give to other charitable donations.

Fast-forward a decade or so, and I’m now wiser and richer. I give my money to organizations that I think will actually help people.
Paul Allen

I don’t think the data presented is sufficient to draw many conclusions. I think a better set of data would show, for donations to religious organizations, 1) what percent is coming from each income group, 2) the percent of people in each income group that give and 3) average “gift size” for each income group.

My intuition tells me the above data can be explained simply by amount of discretionary income. An analogy would be percent of income spent on groceries. The lowest-income group will spend a much larger share of income on groceries than the highest-income group. The higher-income group spends more on “luxury” items, including non-religious giving. As giving increases with rising income it also diversifies to non-religious giving which, by definition, will reduce the percent of overall giving allotted to religious organizations.

An interesting question: Do people see religious giving as a “basic necessity” and non-religious giving as a “luxury”? I think the data might be suggesting that.
Lorelei

What percentage of the swing is made solely of Bill Gates, Warren Buffett, and their group of the super-wealthy who are contributing to the Gates foundation? I love the trend, and I think it isn’t difficult to see the repeatedly-affirmed tie between education, wealth, and lack of religious belief, but I think a more careful parsing of the statistics to account for the few 800-pound grizzlies is in order.
ButchKitties

Maybe wealthy people have more time to investigate how their donations are spent? I looked up my old church’s last financial statement. Less than 20% of the parish’s income went towards charitable disbursements. Over 60% was spent on parish staff salaries and improvements to the building.

I always look an organization up on Charity Navigator before giving money, and there’s no way in hell I’d donate to a charity that spent more than half its income on administrative costs.
Rooker

That is just awful to see how much money is given to the oldest pyramid scam in history and how little is given to worthy causes by comparison.
JRB

Speaking as someone who works as a fundraiser in the non-profit world, I think a some of you are thinking in the wrong direction and missing a more obvious answer.

Health/Education/Arts organizations actively seek out large donations from people with the means to give them. In some cases a fund development office will spend years or decades working to land a $500,000, $1 Million, or $50 Million gift from a single individual.

On the other hand, churches, temples, mosques, etc., (and I’m assuming they make up a good bulk of the ‘religious organizations’ category) tend to ask a larger group of people for more modest donations on a more regular schedule – a group which statistically is going to be made up of a lot more people in the lower income brackets than in the $1 million+ a year brackets.

And even if one of those people sitting in the pews does make a $1 Million+ a year and gives a seemingly generous weekly contribution of $1,000 to the collection plate, it will still take almost 20 years to equal the $1 million gift they gave the local hospital in order to name a room in memory of their parents.

To clarify, people are more likely to give if they are asked (even indirectly, like in the case of a collection plate). As well, people tend to give donations to organizations they feel they have a strong connection to. In the case of a lot of religious organizations, people voluntarily show up on a weekly basis to build those very connections. While some people might feel that same type of connection to the art gallery or museum they visit with their family a couple times a year; or about the college where they spent 4 years working towards their B.A.; or the hospital they went for that knee replacement, most people won’t. So, professional and volunteer fundraisers step in to build those connections in a variety of different ways.

As much as most fundraisers would love to have the time and resources to build those connections with every single person who comes in contact with their institution, reality generally makes that difficult… unless you’re an organization that people go to specifically to build spiritual and social bonds, like a church. (“Should I give the $25 I am able to donate to the art gallery I visit once a year, or to the church that I go to every week to hear about how they are my only path to salvation from a world full of sin/an afterlife of eternal torment?”)

So while religious organizations are able to rely on large amounts of regular, smaller donations from across all four income groups represented in the chart above, most non-religious non-profits tend to put their biggest efforts into securing large gifts from a smaller group of people with the capacity to give at higher levels. (“Well, my pastor is still impressed by the $1,000 a week I have been putting in the collection plate for the last ten years, so I see no reason I can’t give the art gallery the $2,500,000 they asked me for. After all, I’ve been a guest of honour at their gala dinner for the last 3 years, I’ve been on several private tours with the lead curator, and they’ve even asked me to join their Visitor Advisory Council.”)

(I feel I should acknowledge that yes, churches do sometimes embark on major campaigns where they try and solicit larger gifts for big project e.g. repairing a steeple, installing a new stained glass window. And, at the same time, some secular non-profits derive most of their income from a large number of small gift appeals e.g. unaddressed mail-outs, pledge drives. But in both cases these are the exceptions rather than the rule.)
Frank Palmer

You’re analyzing the data with a bias in your question.

When you get a tax break for charitable giving, you can get a lot of advantages from things you call “charitable giving.” You can get your name on a plaque.

So it’s not that they give less of a %age of what they give to churches. It’s that they give what they think appropriate to their church, and also give elsewhere where thy can receive something back.
Stacy

These are very interesting statistics. I think wealthy people tend to give less to religious charities and more to charities like Smile Train and like humanitarian organizations. Why? I don’t know exactly, more money usually means more education, thus being more well versed in worldly matters?
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