Friday, October 26, 2007

Giving Makes you Happier... and Richer

This morning, I went to a fascinating lecture by Dr. Arthur C. Brooks, an economist and professor at Syracuse University and author of the book Who Really Cares: The Surprising Truth About Compassionate Conservatism. Dr. Brooks puts forth a amazing thesis, based not on instinct, but on hard-core economic number crunching (in fact, his findings were counter-intuitive even to him):

Giving to charity makes you richer.

Seems backwards, right? Well, not so fast...

Based on data from Harvard's 2000 Social Capital Community Benchmark Survey, people who give to charity earn significantly more money than those who don't. Dr. Brooks asserts that the data doesn't just show that giving correlates with higher income - it "pushes" income up. He said that the "Personal Return on Investment" from charitable giving is 3.75 to 1. In other words, a person who gives away $100 can expect $375 in higher earnings. It is related, in part, to his second assertion, which psychologists have been making for years.

Giving to charity makes you happier.

Most people who have given a gift to charity can attest to feeling pretty good about it. Psychologists know that giving makes you feel better, and it actually depresses stress hormones in the body (lots of experiments are out there that back this up).

So, if you are happier, your earnings go up, etc, etc.... Dr. Brooks explains his statistical work much better than I ever could in this column on the Conde Nast web site.

Other interesting stats from today:
  • Americans are generous. We gave nearly $295 billion in 2006, more than the GDP of all but 33 countries. And that's not just from huge charitable foundations. Around 75% of that came from private individuals. 75% of American families give to charity each year, and 50% - 60% volunteer.
  • The wealthy are not necessarily the "biggest" givers. The working poor give a bigger percentage of their money away. And they also are the most "income mobile" - their income is most likely to go up (another argument for the idea that giving to charity makes you wealthier).
  • A person who gives at least one gift to charity per year is 43% more likely to say that they are happy than the person who does not give at least one gift to charity per year.
  • 91% of people who attend a house of worship weekly give to charity, versus 66% of people who don't.
  • Living in a community where people give is as good for your health as quitting smoking.
One valuable takeaway - if you are feeling sad or depressed, give some money away! Volunteer! At least give it a try. Statistics show that it will make you happier, and wealthier.

No comments: