Google finds disturbing charity gap

A new study commissioned by Google.org reinforces a disturbing and often-ignored truth about charitable giving in the U.S.

While most Americans who give to charity believe most of their donations help those most in need, the study says, less than one-third of giving by individuals in 2005 actually helped people who are economically disadvantaged.

The study, conducted by the Center on Philanthropy at Indiana University, also found that only 8 percent of donations provide basic necessities for the poor, with another 23 percent, at most, addressing the needs of the poor.

In an opinion column on the study in today’s Wall Street Journal, a Google executive also reports that people earning over $1 million a year give only 4 percent of their donations to address basic needs, and another 19 percent to other programs serving the poor.

And giving by individuals, particularly wealthy individuals, matters a lot in addressing the needs of the poor, Sheryl Sandberg, vice president of global online sales & operations at Google and a board member of Google.org, says in her Journal column.

Giving by individual Americans totals over four times that of foundation and corporate giving combined, she says, and fewer than 10,000 families account for over 20 percent of all donations.

The needs of the poor throughout the world also get the short end of giving, she says, with only 8 percent of all individual giving by Americans supporting international causes of any kind.

“The world’s poorest are virtually ignored by the philanthropic giving of citizens of the world’s wealthiest nation,” she says.

As Sandberg rightly points out, charitable giving that does not target the disadvantaged still supports important causes like education, health and the arts that “benefit everyone, rich and poor, though to substantially different degrees.”

Charitable giving and volunteering are central to the health of American society, and charitable organizations work hard to cultivate that impulse and engage Americans in causes they care about.

But charitable giving overall pales beside human and social problems that are overwhelming in their scope, complexity and impact.

In 2006, charitable giving overall in the U.S. totaled $260 billion, a mere fraction of the resources available to government.

And for four decades, average annual giving by American households has totaled a mere 2.2 percent of average household disposable income after taxes.

And while a new report by the Foundation Center says foundation giving last year exceeded $40 billion, a record, foundation giving overall accounted for only 11.5 percent of overall giving in 2005, according to Giving USA.

And foundations have put up a fierce fight against proposals for an increase in the share of their assets, currently 5 percent, they are required to pay out each year, a total that includes not just grants but overhead.

Clearly, individuals and foundations can give more overall and more to address the immediate and long-term needs of the poor and the underlying causes of poverty.

And whatever their focus, charities can do more to educate their donors and the public about the needs of the poor, and get involved in collaborative efforts to address those needs and their underlying causes.