Leading the Way to Greater Global Giving

I am going to tell you two facts that should make American readers feel proud. The first may not be a big surprise: The United States is the most generous country in the world when it comes to charitable giving. In 2012, Americans gave $316 billion to charity, and according to the annual Giving USA report, approximately $228 billion of that came from individuals. Americans give more to charity, both overall and per capita, than any other nation.

Sceptics might say that measuring generosity in financial terms is always going to favor the United States—after all, it’s the richest country in the world. This brings me to my second fact. Based not on monetary value but on the level of public engagement in charitable activity, the United States still ranks first.

Every year, we at the Charities Aid Foundation (CAF) produce a report called the World Giving Index. Using data from the Gallup World Poll, we calculate the proportion of people by country who give money to charity, volunteer, or help a stranger. From this, we determine each country’s charitable engagement level and assign what we call a World Giving Index Score. Though wealth clearly affects a person’s capacity to give, Americans appear to out-perform nations with higher levels of per-capita income, including Qatar, Luxembourg, Singapore, and Norway.

Given that the United States has the most charitably engaged population in the world, why is this fact not more widely known and celebrated among Americans?

One answer could lie in the country’s strong national predilection for individualism—Hofstede Centre’s research into national and organizational culture describes American culture as “highly individualistic.” Again, this isn’t surprising: From its inception, the United States has valued the rights of the individual and set limitations on the power of the few over the many. A recent San Diego State University study of language in publications over the past 50 years even suggests that individualism is continuing to rise in America.

But while we often see charitable giving as a uniquely personal act, might the tendency to favor the achievements of individuals blind Americans to the true scale of their collective generosity?

We are undoubtedly right to praise the wealthiest of donors for their generosity and the example they set for others. Similarly, the role that celebrities play in raising public awareness of charitable causes helps make those causes visible; it also makes the public aspire to pursue philanthropy.

But we should not take for granted the voluntary contribution of time and money that ordinary Americans make to civil society, and we should not underestimate how important civil society has been in making the country what it is today. By failing to recognize that widespread involvement in charitable activity is just as important to a healthy nonprofit sector as financial resources, we may be missing a historic opportunity for the United States to influence the development of global civil society.

We are living through a time of monumental social change: The world’s global middle classes are set to grow by 165 percent (according to Organisation for Economic Co-operation and Development projections) by 2030, with the vast majority of that growth set to occur in the developing world. Our “Unlocking the Potential of Global Philanthropy” report (part of CAF’s Future World Giving project) estimates that if the expanding global middle class were to give the same proportion of their income to charity as people currently do in the United Kingdom (0.4 percent) middle class donors would generate $224 billion a year by 2030. Though a similar figure is hard to establish for the United States, 1 percent seems like a reasonable estimate, given that total charitable giving currently accounts for 1.45 percent of gross domestic product (GDP). If the world’s expanded middle classes were to match this conservative estimate of American generosity, they would raise approximately $556 billion a year in charitable funds by 2030. Put another way, the world’s middle classes could generate charitable funds equivalent to the current GDP of Switzerland—currently, the world’s 21st-largest economy. If the next generation of global middle classes were to give like Americans, it could more than triple the $175 billion that Jeffery Sachs estimates we need to eradicate extreme poverty.

As billions of people move from poverty to prosperity, we are faced with a window of opportunity to influence the development of charitable culture around the world. We can do this in two ways.

First, we can work with governments to create the right conditions for charitable giving to grow. As part of its Future World Giving project, CAF will be looking at how policies implemented by governments have either helped or restrained philanthropic giving in three crucial areas: building trust in civil society, supporting an independent civil society, and motivating people to give. We will also publish a framework of recommendations to guide governments toward better policies for encouraging giving.

Second, US citizens can help ensure that the world’s generosity increases in parallel to its emergent prosperity by celebrating its own collective achievements. Because the everyday acts of generosity and kindness that power its civil society should be a beacon for the developing world to follow. By showing pride in its position as the most engaged charitable society on Earth, Americans can encourage others to strive and aspire.

Read more stories by Ted Hart.