The Non-Profit Age: Altruistic Values in America

Credit: Forbes
Credit: Forbes

The American nonprofit sector has grown at an exceptional rate and continues to grow each year.  In the 10 years from 2001 to 2011, the number of nonprofits in the United States grew by 25%.  And the sector continues to grow.  In 2010, the U.S. nonprofit sector employed approximately 10% of the country’s workforce and accounted for 9.2% of wages and salaries paid in the U.S.  In 2012, that number had increased to approximately 10.3%, with nonprofits providing 11.4 million jobs to the U.S. workforce.  With as much as the sector has grown in the last 15 years, it’s no surprise that charitable giving has also continued to increase.  In 2014, charitable contributions reached an estimated $358.38 billion.  What’s more, beginning in 2010 there has been an increase in charitable giving for the last five consecutive years (the Urban Institute’s Nonprofit Sector in Brief 2015 compiles and analyzes data through year-end 2014).  In fact, the institute found that private giving has increased 18.2% since 2009.  So, how does the American non-profit sector measure up with the rest of the world? The answer is a lot more convoluted than you’d expect.

Based on giving as a share of GDP, the U.S. comes in first at 1.85% of GDP, followed by Israel (1.34%) and Canada (1.17%).  When you look at volunteerism as a share of GDP, the Netherlands ranks first, followed by Sweden, Tanzania, and Norway.  However, when looking at just the percentage of the adult population participating in volunteerism, Norway comes in first with 52% participation, followed by the United Kingdom with 30% and Sweden at 28%.  The logical question when reviewing this data then becomes, which form is the best?  Are Americans the most charitable because we give the highest percentage of money to charity? Or is Norway truly the more charitable country because more than half of its population participates in volunteerism (compared to just 22% in the U.S.)?  Perhaps, the question is not who gives the highest amount of GDP or who volunteers the most hours per year, but rather, what factors motivate us to give (regardless of form), and how are these motivations shaped by our own unique social circumstances?

In her article “Who Gives the Most,” Elisabeth Eaves suggests that perhaps our charitable activities are a direct response to our culture and political beliefs.  This sentiment also seems to be echoed in Arthur Brooks’ book, Who Really Cares (albeit Brooks’ analysis centers on a national, as opposed to international, perspective).  And in fact, when looking at the philanthropic sector on an international scale, one common theme among developed nations is that those with higher taxes and “bigger social safety nets” tend to have lower rates of giving.  Thus, it’s hypothesized that nations with lower taxes and less extensive social welfare programs tend to feel a sense of duty to step-up where their government lacks, and to privately fund initiatives to fill the needs they see around them.

Information collected through the Comparative Nonprofit Sector Project found that nations with extensive welfare systems put in place by the government were far less likely to engage in charitable giving.  Accordingly, its been argued that lower taxes, and in turn, more disposable income actually encourages greater generosity because people see needs around them and feel that it is their responsibility to do good deeds.  Whereas countries with higher rates of mandatory redistribution, such as France, see less need around them, pay higher taxes, and believe it is the government’s responsibility to appropriately allocate resources and take care of all of the citizens in the community. This in turn allows them to shift the burden from their own shoulders and place it on the government in exchange for paying higher taxes.  Again, this seems to be the case from both a national and international perspective.

Although Americans give the highest percent of GDP to charity each year, this fact alone doesn’t necessarily make the U.S. the most charitable nation. Rather, a more appropriate conclusion might be that Americans see a need in the U.S. that must be filled, and find the best way to fill that need through monetary giving; whereas countries like Norway and the U.K. might see a similar need, but feel that the most appropriate way to effectively fill the need is through volunteering time as opposed to money.  Is one approach better than the other?  It seems that we all feel the same intrinsic impulse to fill the needs we see around us, thus, to draw a distinction between volunteering money, time, or delegating such responsibility to the government is neither necessary nor beneficial, because in the end, charity is charity; regardless of its form.