NEWS FEATURE: In the giving game, the rich give but the poor come out losers

c. 1997 Religion News Service WASHINGTON _ Wealthy Americans tend to give to wealthy institutions, most often the college that upped their earning potential and the hospital keeping them healthy. They don’t give much to the poor. It’s their business where they decide to give their money, but the fact that wealth flows to wealth […]

c. 1997 Religion News Service

WASHINGTON _ Wealthy Americans tend to give to wealthy institutions, most often the college that upped their earning potential and the hospital keeping them healthy. They don’t give much to the poor.

It’s their business where they decide to give their money, but the fact that wealth flows to wealth casts doubt on the idea charitable giving to churches and poverty-fighting groups will fill the gap created by the reforms that ended guaranteed welfare payments.

“As welfare is cut off, we’re holding our breath and waiting,” said Patricia Foster, Salvation Army director of development for Greater New York.

As Americans’ income and assets increased sharply over the last two years, overall charitable giving rose 16 percent. But giving to human services and religious groups went up only slightly. In fact, adjusted for inflation, more money went to human-service charities a decade ago, and those serving the poor are feeling particularly strapped.

Thanks to the rocketing stock market, the number of Americans with assets of $100 million or more has quadrupled in the last 20 years, according to Andrew Hacker, author of “Money: Who Has How Much and Why.”

The top 20 percent of all households control 49 percent of the country’s income, while the bottom 20 percent gets 3.7 percent.

Yet the rich have a pattern of giving quite different from the majority of Americans. Among the 60 gifts of $2 million or more made so far this year, according to a list compiled by the online magazine Slate, more than half the gifts went to universities. And that doesn’t include donations for university medical centers. University hospitals and research institutes received about a fifth of the gifts, and cultural organizations a bit less.

Churches and groups directly serving the poor were barely on the radar screen. By contrast, in overall giving at all income levels, about half goes to religious groups.

It isn’t a moral defect to give to your alma mater, said Boston College professor Paul G. Schervish, co-author of “Gospels of Wealth.” Like middle- and lower-income people, the rich give to organizations that are familiar, he said. For a middle-class person, this is likely to mean a church or synagogue, the Salvation Army, the Red Cross or Catholic Charities.

For a very rich person, places like Harvard or Stanford and the local symphony and art museum are the familiar institutions.

The increase in the wealth of the wealthy has resulted in a cascade of seven-figure gifts to universities over the past few years. Last year, Harvard University reported $427 million in gifts, the highest ever, while Stanford University got $312 million. And Emory University in Atlanta received a single gift of $295 million in Coca-Cola stock.

“If we ever got anything like that $295 million, we’d all fall over dead from cardiac arrest,”joked the Salvation Army’s Foster.” She estimates the average gift to the Salvation Army is $100.

“The Salvation Army doesn’t solve problems, they alleviate them,” said Bernard Rapoport, a Waco, Texas, insurance magnate who has given millions to the University of Texas.

Like many of the richest Americans, Rapoport, whose father emigrated from Russia, believes in education as the best way for the poor to better themselves. Two-thirds of his gifts go for scholarships at the university _”Not a chair, just money right to the kids,” as he puts it.

There are also practical and emotional reasons why the rich give to elite institutions. On the practical side, the large gifts tend to be non-cash, according to Ann Kaplan, research director of the American Association of Fund-Raising Counsel, which compiles the annual report Giving USA.

“Stock, land or art are things that don’t naturally flow toward a human service nonprofit,” she said.

Waldemar Nielsen, author of “The Golden Donors,” studies the emotional motives behind big gifts to big places.

“First, there’s a family connection,” Nielsen says. “It’s where mother died, or it’s the place where my wife and I went to school. Next, it is a very safe and very respectable thing to do _ to give to a well-established, well-regarded institution, not some little neighborhood clinic or child care center. You get recognition from the school and your classmates, and you gain social status.”

According to David Glen, Stanford’s vice president of development in charge of principal gifts, donors have confidence places like Stanford and Harvard will be around for a while.

“We use terms like investments rather than gifts,” Glen says. “You’re investing in something that will be there a lot longer than you or your heirs.”

Raising money for higher education is a lot easier than raising money for a soup kitchen, as Foster can attest. Before coming to the Salvation Army, she worked in the development office of New York University.

“There you’re dealing with a finite audience, with people who are interested and have an attachment already,” she says.

“When you’re working for a social welfare organization, the universe is your audience. You have to somehow snag the people who care.”

Also, chances are that college graduates will have a steady income and some assets. “The people the (Salvation) Army helps probably won’t soon make a killing in the stock market,” she says.

“When people give to a university, there are people they want to impress favorably,” Foster says. “There’s no earthly advantage to giving money to the Salvation Army, other than compassion for one’s fellow person.”


The wealthy, of course, are not all alike or completely consistent in giving only to high-status institutions. There are anomalies like billionaire financier George Soros, who directs millions to programs for inner-city youth.

Along with his multimillion-dollar gifts to the University of Texas, Bernard Rapoport and his wife, Audre, have a family foundation with an endowment of $66 million that pays out $3.5 million a year, mostly to programs for children in kindergarten through third grade in Rapoport’s hometown of Waco, where he discovered many third graders couldn’t read.

Eugene Lang’s most recent gift was $30 million to his alma mater, Swarthmore College, but he’s also the founder of the “I Have a Dream ” program, which helps kids in low-income neighborhoods get to college.

Schervish, a scholar of rich people’s giving habits and director of the Social Welfare Research Institute at Boston College, is tired of hearing people demonizing the rich.

“Everyone always says the rich don’t give enough,” Schervish says. “Then when they give a lot, we say they’re giving to the wrong places.”

“There’s a tradition in this country of throwing stones at the rich: They’re decadent and lazy and undeserving,” Schervish says. “And it’s matched by the tradition of throwing stones at the poor: They’re lazy and undeserving, too.”

“Voluntary giving is voluntary,” says Ann Kaplan of Giving USA. “If your values lead you to give to your school or the arts, I’m not going to say that’s shabby. But it does say something about society in general that we don’t figure out a dependable way of taking care of other human beings.”


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