Coronavirus

Charitable Giving Helps Mitigate the Impact of COVID-19. What's Wrong With That?

Rather than criticize the charitable donations of the very rich, we should be grateful for them.

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One of the new ways critics like to slice and dice rich people these days is to question the value they provide to others by minimizing the importance of their charitable giving. For instance, the top 20 richest people in America gave a cumulative $8.7 billion to charity in 2018, but we are told that this sum is only 0.8 percent of their wealth. The most recent example of this tut-tutting comes to us after Mark Zuckerberg and his wife, Priscilla Chan, donated $100,000 to each of eight of their favorite Bay Area restaurants.

The goal was to help these establishments cope with COVID-19 and hopefully stay afloat during these times of lower demand. In a San Francisco Gate article later recapped by Business Insider, Jessica Snouwaert recognizes that this gesture is "nice," but then writes, "It can be helpful to examine what a comparable donation would like from a nonbillionaire family. In this case, comparing the scale of Zuckerberg's wealth with the wealth of the average US household shows just how deep economic divides run between billionaires and everyday Americans."

The answer to that comparison is that the Zuckerbergs' "$800,000 to the eight Bay Area restaurants is comparable to the median US family giving about $1.02." Yet for practical purposes, that comparison is meaningless.

First, leaving aside the difficulty of measuring wealth, one wonders what the exercise adds to the debate. When the Zuckerbergs buy a gallon of gasoline for say, $2.19, it represents a much smaller portion of their wealth than the same expenditure does for an American of ordinary wealth. But so what? Does that change the value of the product?

To the extent that we want to engage in such comparisons, the only one that is relevant—but that doesn't make it into the report—is the value of the $100,000 to each of the restaurants receiving the money. While the generosity of the Zuckerberg's $800,000 might be no greater than that of the median family giving $1.02, the difference could mean everything to a struggling small business owner.

If you need help assessing how significant the donation is, think about it this way: Assume the economy reopens sooner rather than later and that restaurants will be allowed to cater to their customers in safe ways. If $100,000 helps each of the eight to survive this crisis, then the impact of the Zuckerbergs' donation will extend to the restaurants' employees, faithful patrons, future customers, and suppliers. Simplistic calculations don't reflect this reality.

But such comparisons also display an ignorance that obscures society's understanding of wealth. Many assume that the Zuckerbergs' wealth is sitting idly by in a giant pile at a bank vault somewhere. You also get a sense that whatever money wealthy entrepreneurs don't give to charity is spent on sumptuous lifestyles.

No doubt, the superrich do lead different lives than we do. However, most of their wealth is tied up in productive activities. A vast majority of it is invested in companies. It is used to fund research and development that will create better goods and services for consumers; that wealth is the capital that smaller-scale innovators and producers borrow from banks to grow their enterprises. And it employs workers. The Zuckerbergs' wealth, for instance, contributes directly to the employment of 45,000 people worldwide.

Rather than publish meaningless calculations about the charitable donations of the very rich, we should be grateful for it while it lasts, because there's always a chance that today's rich people or their heirs won't stay rich forever.

In an excellent study on wealth inequality, the Cato Institute's Chris Edwards and Ryan Bourne note that, contrary to common belief, most U.S. wealth isn't inherited. Looking at the Forbes list of the 400 Americans with the highest net worth since 1982, they report that "just 69 individuals or their descendants remained on the 2014 list." In other words, most of that wealth is self-made, and the heirs of today's richest likely won't be as rich.

In short, it's unseemly to complain that charitable contributions aren't even larger than they are—that they're somehow worth less to the recipient, or that those dollars are deemed either cheap or generous, depending on the net wealth of the person giving it. To those in need, it all spends the same.

COPYRIGHT 2020 CREATORS.COM

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  1. Rather than criticize the charitable donations of the very rich, we should be grateful for them.

    For those who criticize, it’s not about the charity, it’s about the wealth.

    1. It’s not about the wealth either. They like Bloomberg’s wealth just fine.

      It’s about individuals acting independently. Better to confiscate that wealth, even if that means the entire economy suffers, because government knows best, meaning the elites that control government.

      1. At least if the elites come from the right tribe.

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      2. Because real charity and generosity can only be enforced at the point of a gun.

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      3. I spend enough time loitering in communist safe spaces to know they just irrationally hate all wealthy people.

        1. Because they think there’s going to be a great awakening among the plebs and we’ll have a revolution with guillotines in all the city and town squares across the planet.

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    2. It is also frequently about the recipient; what the whiners don’t like is a business getting money instead of a socialist co-op getting a building to house their preferred sub-group of a minority section of an oppressed people group.

  2. Zuckerberg could have given the restaurants 10 million each and then we could have bitched about the filthy rich restaurant owners as well.

    1. Beautiful.

  3. I’m just happy this post is better than Fe’s.

    1. We’ll be the judge of that.

  4. How quickly “we” forget that Bloomberg could have used his $400 Million Campaign to give every American $1,000,000.

    1. I heard this is true.

      1. Global climate warming change models have confirmed the math multiple times; it is therefore true.

        1. Thanks Longtobefree,
          I have to wipe coffee off of my laptop now. You’re not a plant from Dell are you?

  5. “One of the new ways critics like to slice and dice rich people these days is to question the value they provide to others by minimizing the importance of their charitable giving. ”

    And those critics’ name”?
    Karen

  6. Nothing wrong with it. I’m gonna need to see some good data that supports it mitigates shutdown damage though. I’m gonna go out on a limb and guess none of the local businesses by me have gotten a dime from rich and famous people.

    At the risk of slicing and dicing, to be sure.

    1. Meh, guess by it’s definition almost anything mitigates the damage.

    2. How many “famous” people live in your neighborhood?

      Nobody “famous” in my hometown has given cash to restaurants, but there is a local couple who has been buying lunches from local eateries and giving them to first responders. I’d guess free box lunches for the whole police force or everyone working in the ER, from a trendy restaurant, a couple of times a week, would represent a good chunk of change.

      They did this for several weeks before they were outed, and got any publicity from it.

      Karen, of course, would point out that it really doesn’t help the restaurants, since the first responders would have eaten lunch somewhere. But then Karens aren’t very popular where I live.

  7. What’s wrong is they expect pats on the back for it and adoration (otherwise they’d do it anonymously), despite donating money that makes no impact on their own lives

    1. Exactly this, if they dont want to be criticized for handing out what to them is chump change, they shouldnt send paid agents out trying to collect accolades for their “generosity”.

  8. “In an excellent study on wealth inequality, the Cato Institute’s Chris Edwards and Ryan Bourne note that, contrary to common belief, most U.S. wealth isn’t inherited.”

    Precisely.

    Reason.com’s benefactor Charles Koch is a great example of a self-made man. He became one of the 10 richest people on the planet entirely through talent and hard work — not by being born with a silver spoon.

    #BillionairesKnowBest

    1. Yeah…but Koch’s wealth is dropping fast. Mores the pity.

  9. The correct response to any gift is “thank you”. If you didn’t get the gift, then the response is “I’m happy for them”. Aside from that, the correct path of action is to “mind your own business”.

    Now that we have reviewed the basic lessons from nursery school, can we move on?

    1. Clearly not a progressive, diversity, inclusiveness, non-violent, feminist, vegan nursery school.

      1. I almost wish they give up the non-violence part, if it would make them less passive-aggressively shitty.

    2. And when you give a gift, you shouldnt pay somebody to send out a press release about it if you dont want to be judged.

      1. Very true! I seem to recall a certain preacher about 2000 years ago making exactly that point.

        That said, (and giving the devil his due) perhaps the giver is hoping to lead by example?

      2. It’s also possible that there was no PR, and that the recipients outed them.

  10. The combined net worth of America’s billionares is less than 6 months of state/local/fed government spending.

    That simple fact should be the refutation whenever progs start whining about billionaires.

    1. They’ll just expand consideration to the “top 1%”.

      Until they understand that assets aren’t fungible, they’ll remain convinced that their communist wet dreams are fund-able.

  11. To those in need, it all spends the same.

    Money printing press go brrrr.

  12. $1.02 doesn’t even get you anything off the dollar menu

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  14. Donate all the money you want to charity if you want; a lot of the anger comes from these rich fucks evading taxes and the resulting immiseration of everyone else because of their hoarding and greed.
    Pay your fucking taxes

    1. Pay your fucking taxes

      No thanks. From my experience most people evade taxes, not just the rich. Doing side work under the table is a time honored tradition in the construction trades.

    2. Spend my tax money wisely, then come talk to me.

    3. I have the impression that many of these folks do pay all of their legally obligated taxes without doing something like Warren’s 50K wardrobe cost (for example), but they do take every reasonably justifiable deduction they can find.

      That said, most of these loudmouths seem to always miss your first point: nothing whatsoever is stopping them from donating every cent they have to whatever charity they want. After they do that, then they can come talk to me about my charitable giving.

    4. Lose the Income tax and move to a National Sales Tax. Problem solved.

      1. Regressive, hits the poorest hardest in terms of the percent of their income that goes to tax. How bout a universal flat income tax (20%) with a single high (15K) per person deduction? Granted the CPA’s would be out of work, and the politicians wouldn’t be able to play as many games, but, tough for them.

      2. And as soon as you have a sales tax politicians start angling about exempt items, sales tax “holidays,” who gets what percent of the money collected, etc.

    5. Which “rich fucks” are evading taxes? And by “evading” I don’t mean “paying less than you, personally, believe they should be paying”, I mean “paying less than the amount we, the people via our representatives, agreed to pay and wrote down the formula for in our tax code.”

      I’m pretty sure Mark Zuckerberg pays the IRS every last penny that he is legally obligated to, but given that he can afford the finest tax advisors that money can buy I’m sure he doesn’t pay a single penny more than he’s obligated to either.

      If you want to complain about how unfair it is that the ultra rich get tax benefits the rest of us don’t perhaps you’d think twice about making such a complex tax code in the first place.

    6. Stop with this “rich don’t pay taxes” bullshit. The top 1% pays more in taxes than does the bottom 80%.

  15. “The answer to that comparison is that the Zuckerbergs’ “$800,000 to the eight Bay Area restaurants is comparable to the median US family giving about $1.02.” Yet for practical purposes, that comparison is meaningless.”

    It’s a matter of generosity. A median family’s donation of $100 can be seen as more generous even though the amount is smaller than Zuckerberg’s donation. If Zuckerberg gave only $100, he’d be deplored as a cheap charlie.

    1. So the value of a donation isn’t its size but how much esteem it casts upon the donator? That seems a bit off. You think if Jeff Bezos tossed a Ben Franklin in some hobo’s cup the hobo would curse him for his miserliness?

  16. If Zuckerberg gives $800,000 and you give $8, then Zuckerberg has given 100,000 times as much as you have.

    Period.

    There is no other correct way to think about it.

    1. “There is no other correct way to think about it.”

      No. There are other correct ways. In university we learn about decimals. You have given 1e-05 as much as Zuckerberg.

      Semi colon;

      1. In another sense he has given 0x186A0 times as much as you as well.

  17. Isn’t Gates’ “charity/giving” – in the form of funding the IHME – kinda why we’re here in the first place?
    Dude needs to be beaten to death

    1. I said that in 1992.

  18. There is a song that claims “all the gold in California is in a bank in the middle of Beverly Hills in somebody else’s name.

    1. All The Gold in California, By Larry Gatlin and the Gatlin Brothers Band.

      1. my great-grandma *loved* the Gatlins … 8-tracks in her Oldsmobile

  19. anonymous and silent donations could have been made.

  20. “But such comparisons also display an ignorance that obscures society’s understanding of wealth. Many assume that the Zuckerbergs’ wealth is sitting idly by in a giant pile at a bank vault somewhere.”

    That’s because most people learned their economics from watching Disney cartoons.
    https://christopherpierznik.files.wordpress.com/2016/01/scrooge.jpg

  21. You really shouldn’t be surprised by economic illiteracy from those on the left. That’s why they are over there in the first place.

  22. Practical accounting question here: How does a for-profit entity book a donation? I know the donation is not deductible for the giver, but wouldn’t it be taxable for the entity insofar as its contribution to profits is concerned?

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