When Presidential candidate Mitt Romney argued that defunding the Federal Emergency Relief program FEMA was necessary he set in motion his likely defeat on November 6th, 2012. He built upon this narrative with his characterization of 47% of Americans as leeches and self-dealing victims on society. This is a peculiarly non-philanthropic vision for America - scarred by a lack of empathy, altruism for fellow Americans; it even goes against enlightened self interest. When the disastrous winds of Sandy wrought havoc on rich and poor alike in the Northeast, even Romney's right wing friends like Governor Chris Christie and Mayor Michael Bloomberg went running to embrace the left leaning - and Clinton-like empathetic incumbent President Barack Obama.
America is fundamentally a philanthropic nation - but Romney represents a group that is profoundly different, and perhaps determined by the housing bubble of mansions in which he lives. And we need to be careful of these folk in bubbles.
Recently, George Lucas the director of "Star Wars" announced that he will donate the $4.05 billion that he will receive from the sale of Lucasfilm Ltd. to Disney to a foundation focused on education, according to the Hollywood Reporter.
Prior, in his 2010 letter to the Gates Pledge Lucas wrote:
"I am dedicating the majority of my wealth to improving education. It is the key to the survival of the human race. We have to plan for our collective future -- and the first step begins with the social, emotional, and intellectual tools we provide to our children. As humans, our greatest tool for survival is our ability to think and to adapt - as educators, storytellers, and communicators our responsibility is to continue to do so."
What makes George Lucas different than the majority of wealthy people like Mitt Romney? Is he different? Certainly his actions are. It is empathetic, altruistic, yet also peculiarly American in that it is may also be an investment which offers "returns" to those who fund it. As Olivier Zunz explains in his book Philanthropy in America:
"...American philanthropy is not a matter of the rich helping people in need, but of people, rich or not, providing for their own future. American philanthropy contains a very important and motivating element of frank self-interest. Donors themselves gain when their contribution leads to a cure for a common disease or when it provides them access to better cultural amenities. "
Romney's approach is perhaps the antithesis of all of this: it suggests a marked lack of empathy and reflects the let the uninsured die philosophy that shocked most of us during the Republican primary debates. Why is Romney different from Lucas?
Lucas apparently recently participated in the Forbes 400 Giving Summit as did Katherine Lorenz, granddaughter of Cynthia and George Mitchell of famed Fracking wealth (Fracking refers to the procedure of creating fractures in rocks and rock formations by injecting fluid into cracks to force them further open. The larger fissures allow more oil and gas to flow out of the formation and into the wellbore, from where it can be extracted. Fracking has resulted in many oil and gas wells attaining a state of economic viability, due to the level of extraction that can be reached but has many environmentalist detractors).
I was seated next to Katherine Lorenz at a dinner party about a week ago. She currently serves as the President of their family foundation. Katherine related a very personal story to me of living in and starting a nonprofit in Mexico to help farmers. After a number of years she realized that their plight was more global and has since dedicated herself to issues of climate change.
She repeated that story on her panel at the recent Forbes Magazine 400 Summit on Philanthropy.
Katherine and George Lucas are on to something - but they don't realize it I think. Katherine for example talks about helping next generation philanthropists (those who have inherited great wealth) find their own passions rather than simply replicate the passions and assumed identities of their parents. She is right of course - if you have a passion you'd likely stick with it and give it more of your time, talent and treasure, than if you didn't. However, she has a deeper experiential point that she also discloses. And a point that the entire Forbes 400 Summit might have missed: Katherine and her family - like George Lucas - besides making the Gates Giving Pledge to give away at least 50% of their wealth have also exemplified another crucial action. She has lived in and experienced a mixed income community. The Romney's exclusive lifestyle simply does not.
Research convincingly shows that social context had a lot to do with giving levels by wealthy people. George Lucas has made the news recently because of his interracial relationship with the famous Mellody Hobson an African American. While I don't know how much Hobson has influenced Lucas, the fact of their differences has an impact.
The main difference between the rich and poor is their social environment. When you put rich households in a different social context they can be just as charitable as others.
Despite the example of Katherine and Lucas, and the other 398 philanthropists who gathered at Forbes magazine, many of America's wealthiest households do not appear to share their same ability to empathize with the needy. Wealthy households are actually less likely than poor households to exhibit empathy and consideration for others through charitable giving. Indeed a 2002 study "Giving and Volunteering in the United States" found that households that earn under $25,000 contributed 4.2% of their income to charity, whereas households making $100,000 or more contributed only 2.7%. More recently a Chronicle of Philanthropy study (Gipple, Emily, and Ben Gose, "How America Gives," August 19, 2012) concluded that households that make $50,000 to $75,000 give 7.6% of their discretionary income to charity on average while households that make over $100,000 give just 4.2% on average.
The fact is that social class has a deterministic effect on prosocial behavior. Research found that inducing participants in a psychological experiment to temporarily experience a relatively lower social rank causes them to endorse more generous charitable donations. For example, when the wealthy do encounter poverty, they are capable of acting just as charitably as lower-income households. Perhaps this helps explain the Katherine Lorenz and George Lucas examples of giving. Maybe Romney both hasn't experienced poverty or he simply lacks the capacity to be empathetic - a sign of people with narcissistic personality disorder.
What is fundamentally different about most of the world's wealthy is the closed social world they inhabit. The social environment of the wealthy is startlingly insular. Social Psychologist Paul Schervish explains that, "Simply seeing someone in need at the grocery store--or looking down the street at a neighbor's modest house--can serve as basic psychological reminders of the needs of other people. Absent that, wealth will have these egregious effects insulating you more and more."
The composition of a person's network influences their charitable habits. In today's America, with the growth of suburbia and gated communities, high-income households are less likely to witness someone in need--the expensive organic market that wealthy suburban families (or their staff) may frequent is unlikely to have a great number of impoverished patrons. Wealthy households in economically-homogenous neighborhoods donate even less. In neighborhoods where more than 40% of households reported earning $200,000 or more, each household donated just 2.8% of disposable income on average, compared to 4.2% for the average household that earned over $200,000 annuals. Neighborhood composition clearly has significant effects and we should be pressing the wealthy to pledge to live in more mixed income communities.
Wealthy households are less exposed to the adversity of others, and, as a result, are less likely to contribute to charitable causes. (This does not disprove other facts that wealthy people also face some challenges--in fact, the children of the affluent are more prone to substance abuse, anxiety and depression-- but they are not as philanthropic unless they have the opportunity to empathize with less privileged people).
Not surprisingly, poor households are highly embedded in their local communities and are relatively more reliant on others in their network while rich households tend to be cosmopolitan, independent and less connected. As a result, rich people are "trained" to be less empathetic, which is strongly correlated with charitable giving and other pro-social behavior. (Think again of Mitt Romney's pandering to them with his gross mischaracterization of the 47%).
Were the rich more rooted in the community they would be significantly more philanthropic. Indeed charitable giving may 'have less to do with generosity than with the density and mix of the network of formal and informal association within a person's local community' Paul Schervish writes. In this regard, the social environment that the rich occupy in America makes it significantly less likely that they will donate to charity.
I don't think wealth is an automatic disqualifier; but a lack of empathy should be. How do you serve all 100% of American citizens if you simply cannot empathize with them?
Rich households are already able to provide themselves with cultural amenities and healthcare. Because of this, they need not donate to (or, invest in) research for the cure to a common (or uncommon) disease. In this regard, wealthy Americans may simply substitute hedge fund investing for charitable donations. It should not be surprising that wealthy American households give relatively less to philanthropic causes--the rich simply have access to better "pure" investments than the lower-income households and do not need to "invest" in charity.
Paul Schervish explains:
"the greatest portion of giving and volunteering takes place in one's own community and church and helps support activities from which the donor directly benefits."
What appear to be genuine displays of empathy could merely be disguised self-interest. In addition, as George McCully writes, from a historical perspective it is difficult to deny that nonprofits and philanthropic initiatives have become increasingly corporate, disguised as more professional. As a result, if charity is truly just another form of investment akin to stocks and bonds, then it is difficult to fault the rich for choosing to direct their money elsewhere.
I have a more generous perspective. Charity is generally a public good and, therefore, philanthropists like George Lucas will rarely ever get an economic return from their donation. If the modern construction of the term philanthropist was truly a synonym for investor then the behavior of modern philanthropists would be odd. As my student Derek Walker in Yale Philanthropy in Action writes: "While there are charitable initiatives that personally benefit the donor--donating to a local theater that you regularly attend, for instance--many initiatives that receive massive amounts of funding never offer concrete, economic returns to the donor. Other than enhancing his public profile and increasing his self-esteem, it is difficult to imagine that Bill Gates directly benefits from distributing bed nets in sub-Saharan Africa."
More importantly, the research of Paul Piff and other psychologists show that philanthropy does stem from altruistic sentiments. There is little psychological research to support the notion that people view charity as an investment, even if philanthropy is becoming increasingly capitalistic. Rather, most research suggests that charitable giving is related to altruism and empathy.
Therefore, wealthy American households are not simply capitalists who choose not to invest in charity. Instead, there truly is a fundamental social disconnect that prevents wealthy households from exercising the empathy and consideration for other American citizens that middle-class households exhibit.
I would love to suggest policies to close this philanthropy gap; it seems clear that getting the wealthy to give more requires that the wealthy become increasingly and consistently aware of the plights of others. The average high-income household in America may never give as much to charity as other households. But some of the wealthiest Americans do exhibit consideration for other citizens. Lorenz, Lucas, Gates, Buffet, and others have all shown a willingness to consider the challenges that others face and, under the right social conditions, so could many of America's other wealthy households.
Romney simply doesn't. As we go to vote for President on Tuesday, November 6, 2012, think of the recent Storm Sandy, the Bloomberg endorsement of Obama, and of the philanthropic acts of Lucas and Lorenz. Your vote should then become clear - if it isn't already.