The Recession Turned the Rich Into Stingy Jerks

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A charitable fund-raiser for amfAR.Photo: Venturelli/Getty Images

The recession made the middle class more generous and the rich more Scrooge McDuck–like.

That is the conclusion of a new study from the Chronicle of Philanthropy, which found that low- and middle-income families gave a bigger proportion of their income to charity in 2012 than in 2006, even though they were earning less. The wealthy gave a smaller proportion, even though they were earning more.

To be specific, according to the Chronicle’s analysis of tax data, families making $25,000 or less increased their share of income going to charity by 16.6 percent. Families earning $200,000 or more slashed their giving by 4.5 percent.

New Yorkers, by the way, got less charitable over that time. By 2012, families in the metro area earning less than $25,000 a year gave away an average of $1,416, or about 6.1 percent of their adjusted gross income. Families earning more than $200,000 a year gave an average of $19,327, or 2.7 percent.

(A caveat: The study measured giving by analyzing the tax returns of households that itemize their deductions. This might offer a skewed view of giving at the low end, given that almost all poor families take the standard deduction. That said, the study’s authors said it covers about 80 percent of overall charitable giving.) 

So what gives?

Simple inertia probably explains part of the phenomenon. Let’s say your household routinely donates $1,000 a year to charity. That will be a bigger proportion of your income if your income falls, as middle-class incomes have, and a smaller proportion if your income rises, as has been the case for many rich families.

On top of that, according to the Chronicle’s analysis, rich families might have gotten spooked by the recession, leading them to ratchet back their giving even as their incomes rebounded. High-income households’ incomes dropped during the worst of the recession and its aftermath before springing back. In contrast, the earnings of low-income households started slithering down in 2007 and have only recently started to hold steady.

One way or another, recession or no recession, recovery or no recovery, low-income families reliably give a bigger piece of their take-home pie to charity than their higher-income counterparts. And science might offer another explanation as to why:

Living high on the socioeconomic ladder can, colloquially speaking, dehumanize people. It can make them less ethical, more selfish, more insular, and less compassionate than other people. It can make them more likely, as [psychologist Paul Piff] demonstrated in one of his experiments, to take candy from a bowl of sweets designated for children. “While having money doesn’t necessarily make anybody anything,” Piff says, “the rich are way more likely to prioritize their own self-interests above the interests of other people. It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.”

In other words, the larger trends of the past decade — economic stagnation paired with remarkable income disparities — might have made the rich act more, well, rich.