Saturday, August 8, 2009

Why Giving Matters

This will be long. I can't help myself.

I just read this incredible article. The writer starts off by talking about John D. Rockefeller, and how in 1905 he was quoted as saying, "God gave me my money." (Reo Bennett, "How the Richest Man in the World Observes Christmas," Woman's Home Companion, December 1905, p. 14) This statement made more than just a few people upset with him, thinking that he meant that he was saying God made him rich and left other people poor because he was better than them. That is not what he meant. A year later he clarified by saying essentially that he believed making money was a gift from God, and that you have to develop it to benefit mankind. He believed that God allowed him to have so much money because he used it to help others, and that if he stopped being so generous and giving of his money, God would take it away.

The author of this article is Roman Catholic, so he does believe in God. But he is also an economist, and he just did not believe the idea that you can make money by giving it away. He set out to prove Rockefeller wrong. He decided to look into the data of Americans, their incomes, and their habits of giving. First he compared our country to other countries. The average American gives 3 and a half times more than the average French citizen, 7 times as much as the average German, and 14 times as much as the average Italian. Then he looked to see if that is because we are "richer" on average. If you correct for income differences, and tax differences, the gap doesn't close.

Harvard University collected data on 30,000 American families from 41 communities coast to coast in a comprehensive look at people's service behavior and charitable giving. He waited for these data because he was going to use it as a statistical way to show that you have to have money before you can start giving it away - that you can't make money by giving it away. He worked for months on his computer. He did find that as people get richer they give more away. Unfortunately for him however, he also found that the more you give, the more you prosper. For example, if you have two identical families, same religion, same race, same number of kids, same town, same level of education - everything the same except one family gives $100 more to charity than the second family. Then the family who gives earns on average $375 more in income than the non-giving family - and it is statistically attributable to the gift. ???

He was so perplexed by these findings that he threw them all out, and started over again. He got new software, new data, and he reworked the whole problem. This time he looked at people who volunteer too. People who give of their time to volunteer do better financially. He ran the numbers on blood donations. You're not going to get richer if you give blood, are you? Well, yes, you are. Again, he was frustrated with these findings, so he completely ignored them. He decided to try another approach.

No matter how he looked at it, it was undeniable. If you give of your money, your time, your talents, you will have more money, statistically speaking. (That is to say, perhaps not every one individual will find this to be true in their case, but keep giving, and karma will bless you later!)

What are his conclusions? What should we do with this information? We need to fight the myths of gift giving.
Myth #1 - Giving makes us poorer. Well, this economist just proved statistically in three different ways that this just isn't true.
Myth #2 - People are naturally selfish. Also not true, when we are our best selves, when we are at our happiest, (think Christmastime!!) we are giving.
Myth #3 - Giving is a luxury. It's not. It is a necessity, we must give the first 10%, not the last 10%.
Myth #4 - You will hear in the coming days and weeks and months that if our country were doing what it should be doing for people in need, then we wouldn't need private giving, that the government would be taking care of people who need it, and that we would not need you to step in to provide for others. I am here to tell you, having looked at the data, that the day the government takes over for you in your private charity is the day we get poorer, unhappier, and unhealthier. We must demand to take our place as givers and support the communities and people who need the services we can provide."

Arthur C. Brooks is president of the American Enterprise Institute. This is adapted from a forum address given on February 24, 2009. (And then I took it and summarized it from the adaptation, which I found in the summer 2009 BYU Magazine p. 26) The statements in bold I took straight from the article.


  1. Wow thanks for sharing that Amy! I think he makes a really good point (and you do too!) that people should take care of people in many areas and let the government take care of other things. I know I'm certainly happier when I'm volunteering and donating!

  2. Here is how Elder Uchtdorf explains it. "When we reach out to bless the lives of others, our lives are blessed as well. Service and sacrifice open the windows of heaven, allowing choice blessings to descend upon us. Surely our beloved Heavenly Father smiles upon those who care for the least of His children." As we lift others, we rise a little higher ourselves. President Spencer W. Kimball taught, 'The more we serve our fellowmen in appropriate ways, the more substance there is to our souls' (The Teachings of Spencer W. Kimball, ed. Edward L. Kimball [1982], 254)."
    Dieter F. Uchtdorf, "Happiness, Your Heritage," Ensign, Nov. 2008, 119

  3. Thanks, Amy! That's fantastic news. P.S. I'm way impressed with your citation skills. :)

  4. Thanks, Amy! That's fantastic news. P.S. I'm way impressed with your citation skills. :)