We penalize those who have least money

People automatically assume that someone who gives less money to charity is less generous according to new research published in the journal Behavioral Public Policy. The assumption was made in the study in which people knew what others donated but had no knowledge of how much this was as a percentage of their overall income.

Participants were able to choose to ‘penalize’ different groups of people based on their contributions to society. The researchers found that participants tended to ‘penalize’ those who had given smaller cash amounts to charity in real terms, without realizing that those people had actually given more as a proportion of their income than their wealthier counterparts.

However, the participants’ behavior changed completely when they were made aware of others’ incomes. Participants then ‘penalized’ the rich for giving a lower percentage, even when the cash amount was more in real terms.

What the researchers say: “This lack of awareness of inequality can have substantial consequences for society—how we treat each other and what we expect others to contribute to society,” said the lead author of the report.

In one experiment, participants were given actual figures from a list of five U.S. school districts and told the annual donation given to each of their Parent Teacher Associations (PTA). They then had to choose which school district should pay an additional tax bill, which would benefit all five districts collectively. Those participants who didn’t know the average income of parents in each area chose to levy the tax on the poorest school district - which had given the least amount of money to the PTA in real terms. Those who were made aware of the average incomes chose to give the tax bill to a school district with richer parents, who had given less as a proportion of their income.

“If people don’t realize how little the poor actually have, they may be less sympathetic to the lower contributions made by that group,” said the co-author.

“Conversely, they are less likely to view the rich negatively for not contributing their ‘fair share.’ This can have real implications for the on-going gap between the rich and poor in society, particularly when it comes to making decisions on how to distribute public resources fairly.”

The income distribution used in the four studies detailed in the research article used recent figures from actual U.S. income distribution, which ranks among the most unequal in the Western world.

So, what? In proportion to their income the rich in most countries pay much less in tax than middle-to-low income earners and almost nothing on their inherited wealth (even in countries and states where there are estate taxes).

Other studies have shown that the donations that rank highest among the richest citizens are to causes which will feed their own reputational ego—university buildings or professorships that bear their names for example. That’s how Harvard got so rich.

Other studies have shown that the richer a person is, the less generous he or she is. Mostly this is because they don’t understand how poor others can be. Researchers have shown that there are two kinds of “bubbles” that people get locked into  - the “executive bubble” where corporate executives are unable to really hear or understand what is happening in their companies and the “wealth bubble” where they assume that even if they inherited their wealth they somehow “deserved it” and that luck and circumstance had no part to play. They also tend to assume that those poorer than themselves are either lazy or otherwise at fault. So why should they contribute to the “undeserving?”