Chapter 28

Problems with Philanthropy

Why is it that gifts to causes (charitable, religious, artistic, scientific, environmental, educational, and so forth) are not more common? In the United States in 2010 only 2.2% of national income was given away by individuals and organizations.1 It would seem that people would give more. With just a little thought one naturally concludes that we suffer what economists would call diminishing marginal utility of consumption; that is, one cannot really consume a large amount of wealth. Certainly there are always others who are in greater need. So why don’t people see this and do something about it?

Giving as we observe it today seems often to be a distinctly unrewarding experience. People often give merely ...

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