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Charitable Giving and Income: Households with High Income Donate Less than Poorer Households Relative to Their Disposable Income

Author

Listed:
  • Karsten Schulz-Sandhof
  • Jürgen Schupp

Abstract

For the first time in 2020, the Socio-Economic Panel (SOEP), an annual survey of private households, surveyed the donation behavior of a random sample of high net worth individuals that had been added in 2019. As a result of this sample, the volume of private donations increased from 9.7 to 10.3 billion euros in 2019, despite the fact that fewer individuals donated and the donation rate was lower (46.8 percent vs. 43.3 percent) than in 2017. The donation volume for 2021 will increase to 12.9 billion euros, its development extrapolated using the DZI Donation Index (DZI Spenden-Index). Socio-economic analyses of SOEP data show that income has a clear influence on donation behavior. Although the richest ten percent of households contribute 37 percent of total donations, they donate less than the poorer income groups relative to their disposable income. Despite this, the tax benefit from charitable giving is greater for richer households than for poorer because it is based on the marginal tax rate. Equal tax treatment for donors regardless of income could increase the willingness to donate.

Suggested Citation

  • Karsten Schulz-Sandhof & Jürgen Schupp, 2022. "Charitable Giving and Income: Households with High Income Donate Less than Poorer Households Relative to Their Disposable Income," DIW Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 12(45/46), pages 283-292.
    • Handle: RePEc:diw:diwdwr:dwr12-45-1
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    More about this item

    Keywords

    donations; charitable giving; income; SOEP;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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