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When it comes to charity, the poor give more

Marketplace Contributor Dec 14, 2012
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When it comes to charity, the poor give more

Marketplace Contributor Dec 14, 2012
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If you’re cash strapped — and who isn’t? — this time of year can be tough. So, to help make ends meet, something has gotta be sacrificed from your spending budget. But if you are low income, it probably won’t be your charitable giving, and here’s why: Poorer folks tend to give more to charity than richer ones.

According to a study by the Chronicle of Philanthropy, those who earn $50,000 to $75,000 donate about eight percent of their discretionary income. That’s twice as much — percentage-wise — as those making above $200,000.

“[It’s] really a curious pattern… What we’ve been finding is that people that have less, give more,” says Paul Piff, a researcher at UC Berkeley who has studied this phenomenon.

In one study, a classic psychological set-up called the Dictator Game in which respondents are given $10 and then asked how much they would like to donate to a stranger, researchers have found that individuals making less than $15,000 a year give away $7 on average. In comparison, high earners upwards of $200,000 or $250,000 only give away about $2 or $3.

“When you study the psychology of having less, you find that people on the lower ends of the economic ladder are a little more sensitive to the needs of other people, they are a little more empathetic and compassionate,” says Piff.

On the other hand, Piff adds, “[Wealth] gets you to be a little more disengaged from other people, a little more focused on yourself and as a result it creates this kind of buffer between yourself and other people.”

According to Piff, it’s this buffer that may be holding high earners back from giving more.

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