Why do Americans give?

It is ingrained in the American character to believe we are the hope of the world.

Parents, teachers, religious and civic leaders proclaim the idea as a fundamental truth long before we’ve learned how to question the things we are taught. We believe we willingly share our good fortune. We believe that is a fundamental to being an American.

But there’s another strain in the American character, a part of us that our writers and poets treat more candidly than the publishers of our grade-school history books. It is the elbows-out, capital-amassing, acquisitive side of us that is dissected in our best literature. Our most memorable fictional characters are Americans of this stripe.

So what’s the reality? Who are we, really?

Are we altruistic and generous? Or are we stingy and greedy?

Why do we give?

The charity world spends a lot of time addressing these questions. Charity administrators study why people give, or don’t give, and how donors view their programs. The answers go to the heart of the services they provide and how they get money to pay for them.

An ambitious attempt to understand
The cumulative result has been a lot of writing, thinking and applying that modern Holy Grail of analysis — polling — in an effort to understand donors.

But there is evidence that approach — the dispassionate analysis of why we give and the tailoring of fundraising efforts to reflect the answer — has contributed to a general feeling of uneasiness about charities. It offends our idealism, undermines our egalitarianism and suggests that, perhaps, we are not so innately good after all — that we need to be cajoled into sharing our wealth.

Blake Bromley is typical of the breed of accountants and lawyers who scrutinize the ledgers of charitable organizations and guide their administration. Working from a base in Vancouver, Bromley has spent a lifetime developing a multicultural knowledge of the charity universe — among his clients are governments in England, Russia, Vietnam, China, Australia and South Africa. Along the way he has become something of a lawyer-philosopher on giving. 

Bromley says the answer to the question of why we give is complex -- a product of the economic, social and political environment of each individual donor. He believes it is a question better left unanswered — that reducing donor motivation to broad categories, and using that information to frame fundraising drives, is cynical and misses the point of giving.

“Charities must concentrate more on fulfilling and communicating their mission and less on slick fundraising initiatives if they are to survive,” Bromley has written.

But skepticism about charities is nothing new. Cynicism about American giving, and doubts about the reliability of donors were at the heart of a pivotal debate over tax policy a century ago.

The tax deduction for charitable donations — the single institution that binds the most people together in the U.S. charity universe — was attached to an income surtax in 1917. Its early history suggests that the unappealing Americans of literature and film — the Dimmesdales and the Babbitts, the Gatsbys and the Angstroms, the Charles Foster Kanes — reflect our true character.

Charitable deduction is offspring of war
The tax deduction was born of war, debated in an environment of unabashed jingoism, pushed into law by an elitist Senate and administered by a commissioner of revenue whose public writings starkly illustrate the racism of the day.

America needed money to fight Germany. In February 1913, the states had ratified the Constitutional amendment paving the way for the modern income tax, which was adopted in October. The War Revenue Act of 1917, which contained the charity tax deduction, was an additional income tax to raise $2.5 billion dollars for the war. 

The Income Tax Amendment was a progressive reform. Its supporters viewed it as a brake on the influence of wealthy Americans. Wealthy Americans, in turn, felt attacked, even more so when the 1917 revenue bill came along.

But they had a friend in the Senate in Henry French Hollis of New Hampshire.

Hollis had graduated from Harvard and was a Smithsonian Institution regent. In the grand tradition of the Senate, he was to leave that institution in 1919, become a member of the Interallied War Finance Council, the United States Liquidation Commission for France and England and, ultimately, a wealthy international lawyer.

Hollis, in short, was an insider.

When the War Revenue Act reached the Senate, Hollis argued for the amendment that embedded charitable deductions into American tax law for good. But benevolence was not his motivation. He did it out of fear for the survival of the institutions that the American elite relied upon.

American colleges —which mostly served the wealthy — were heavily dependent on donations from moneyed people at the time. They could collapse, Hollis argued, if those donations dried up. Faced with an additional tax, “that will be the first place where wealthy men will be tempted to economize,” the senator argued. “Namely, in donations to charity,” and while he mentioned other causes, his main focus was colleges dependent on rich graduates — like Harvard, his alma mater, cradle of the American elite.

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