Tuesday, August 17, 2010

Why Giving Matters part 2

I hope you enjoyed Part 1 of Why Giving Matters by Arthur Brooks. Read on for Part 2. It's amazing. Linda Garner

Specifically, here’s what I found: Say you have two identical families—same religion, same race, same number of kids, same town, same level of education—everything’s the same, except that one family gives $100 more to charity than the second family. Then the giving family will earn on average $375 more in income than the non-giving family—and that’s statistically attributable to the gift.
Now I was perplexed. The data completely contradicted the theory that I’d always worked under. So I did what college professors always do in this case: I got rid of the data. I got new software. I looked for new data. I recrunched the numbers. But I kept coming up with the same thing.

I ran the numbers again and looked at volunteering. I found the same thing: People who volunteer do better financially. I ran the numbers on blood donations. Think about that—giving blood. You’re not going to get richer if you give blood, are you? Well, yes, you are.

I figured it couldn’t be right, so I ignored the findings. I didn’t publish them. Then I decided to look at the whole United States and see how charitable giving had changed over a 50-year period and compare it to how income had changed.
I examined the average American family between 1954 and 2004 and found (adjusted for inflation) a 150-percent increase in real purchasing power. Family charitable giving also increased over the same period—on average by 190 percent. What this says is that we’re getting more prosperous in this country, and we’re getting even more generous over time. This result tells me once again that what Jimmy Carter said about this country is not right. We’re not a stingy country. Could we be more generous? Of course we could. But we’re not getting stingier.

So what do we conclude? Is income driving up donations or are donations driving up income? The answer is both. When our country gets richer, people give more away. And as we give more away, that translates into economic growth for our country.

If we were to increase our private charitable donations by just 1 percent, which is about $2 billion a year, that would translate into a gross domestic product of about 39 billion new dollars. If I can take your $2 billion in charity and turn it into $39billion, then suddenly charitable giving is not just a great investment for you. It’s also a patriotic act for our country because it translates into jobs, growth, opportunity, and tax revenues.

The Happy Result of Giving
The more I ran the numbers, the more I kept getting this crazy result. But still I refused to believe it. In desperation I finally went to a colleague who specialized in the psychology of charitable giving. “I’m getting this result I can’t understand,” I told him. “It doesn’t make sense. It’s like the hand of God or something on the economy, and I can’t believe it’s true.”

“Why don’t you believe it’s true?” he asked me. “You’re a Christian, aren’t you?”
This shook me a bit, but just for a second. “Yeah, but I’m also a social scientist,” I shot back. “We’re not supposed to believe those things. I need a more earthbound explanation.”

“Well, I’ll give you one,” he said. “We’ve known this for 30 years in the psychology profession. You economists— you worry about money all the time, and money is boring. We worry about something that people really care about—the currency by which we really spend our days—and that’s happiness. We’ve known for 30 years that people who give get happier as a result.”

Now I knew from teaching at a business school that the best way to run a successful business is to hire happy people. If you want to be a productive person, work on your happiness. Happy people show up for work more, work longer hours, work more joyfully, and are happier with every aspect of their productive lives. Happiness is the secret to success. Charity brings happiness, and happiness brings success.

People who give to charity are 43 percent more likely than people who don’t give to say they’re very happy people. People who give blood are twice as likely to say they’re very happy people as people who don’t. People who volunteer are happier. You simply can’t find any kind of service that won’t make you happier.

Studies show that when people give, it lowers their levels of stress. People who do their jobs with less stress tend to be more productive and successful. Throughout our lives, if we can find ways to relax, we will profit from it.

Isn't this awesome! Be sure to come back tomorrow for part 3.

Linda Garner

1 comment:

Bethany Mason said...

This is a really interesting perspective but I believe that if we were to give only because we believe it will make us richer, then we won't actually become richer because we won't be getting happier. You can only give if you want to give otherwise you may feel resentment to the cause which is certainly not benefactory. Am looking forward to the rest of the essay with interest.