Would you pledge a portion of your income to charity?
Manchester United footballer Juan Mata made headlines when he announced he was donating 1% of his salary to Common Goal, a pledge-based initiative he helped launch, generating social change through football. The Spaniard triggered an industry-wide movement, inspiring fellow pros Giorgio Chiellini, Mats Hummels and Serge Gnabry to follow suit. The hope was these public figures donating would spur other footballers, but also the wider population, to sign up.
While many sports people, who often benefit from generous salaries, can afford to pledge a portion of their income regularly, what about the average person?
Sarah Smith, Professor of Economics at the University of Bristol observes on average, households tend to give 1.9% of their income to charity. Of that, “The proportion of their total budgets given by the poorest 10% of households is around 3%, compared to just over 1% among richer households. However, only one-in-10 poorer households gave anything, compared to more than half of richer households.”
Proportionately speaking, this is more than the footballers’ annual donation. According to non-profit organisation The Life You Can Save, people on similar salaries (estimated at £140,000-per-week), could afford to give up 23.5% of that wage, or around £1.6m a year.
This suggests focus should be on encouraging people to give at all, rather than making a percentage donation mandatory. According to the Charities Aid Foundation (CAF), 33% of the UK population regularly donates, but the number is declining, particularly in younger generations. This is one reason footballers offering a positive philanthropy role model is important.
The total UK GDP (gross domestic product) is around £2 trillion, so everyone giving 1%, championed by initiatives like Pledge 1%, would add up to £20 billion. This is, Sarah suggests, “about double the current level of individual donations, and about the same as getting the 20 richest people to donate 10% of their wealth.” Though footballers’ salaries get a lot of media attention, they are dwarfed by the super-rich, whose wealth has potential to effect vast change.
Sarah continues, “If all Premier League footballers gave away 10% of their annual salary, it would raise about £200m, based on the total wage bill of the Premier League, (which, in 2016-17, was £1,925 billion). Total UK donations are currently around £11 billion, so even an extra £193 million would represent a fairly moderate 2% increase.”
“The total wealth of the richest 20 people in the UK amounts to more than £100 billion, so if they gave away 10% of their money, donations would double. The total riches of 139 ‘giving pledgers’, who have agreed to donate 50% of their wealth, is £731 billion.”
The Giving Pledge is a growing philanthropic movement designed to encourage the world’s wealthiest individuals and families to dedicate the majority of their wealth to giving back. Currently, the non-binding motion has 183 signatories, including Virgin supremo Richard Branson, Microsoft master Bill Gates and hi philanthropist wife, Melinda.
While those who philosopher Peter Singer, author of The Life You Can Save: How to Play Your Part in Ending World Poverty, describes as “middle-class or above in an affluent society” would all be expected to participate, there would potentially have to be exceptions if a mandatory donation was put in place. The elderly, those in education and those living below the poverty line could all be excused, but the question arises about whether it’s right to make donations obligatory.
Professor Kimberley Scharf, Head of the Department of Economics at Birmingham Business School, suggests it might be a difficult ask. “We already have mandatory donations to public goods in the form of taxation. Charitable giving is distinctive from tax in being voluntary, and I think it should remain that way. The original rationale for exempting charities from taxation was that they were doing things the government would otherwise have to support with tax revenue. So the question is, are donors contributing to things the government would otherwise provide? It’s about the causes the money supports and the effectiveness with which it is used, and compulsory giving is just coercive taxation.”
Complications arise with the idea of charities providing society’s public goods or services, as donors’ opinions of where their money should be spent “May not reflect broader societal considerations, which is something the political process and taxation is supposed to do,” suggests Kimberley. Even if a donation wasn’t made mandatory, if people just started partaking of their own accord, huge change could be brought about quickly.
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If given to Against Malaria, for example, Juan Mata’s current annual donation of around £70,000 alone could protect 55,000 people from the illness for three to four years. Everyone pledging 1% (which is currently less than people who donate are choosing to give), or the richest 20 people in the world giving 10%, would total £20 billion a year. If this began, Peter predicts it would inspire many to do the same across Europe, North America and other affluent countries. “It would make a huge difference. That amount could dramatically reduce extreme poverty, although admittedly we would still struggle with poverty caused by violent conflict and climate change.”
According to The Life You Can Save Charity Impact Calculator, the money Oxfam receives could provide school meal programmes to 735,500,517 children for one year, or 514,850,400 households with seeds and tools for farming. Alternatively, the charity could build 257,425,200 latrines to protect the health of families displaced by natural disasters or conflict, 143,014,000 washing stations for hand sanitisation at rural schools to prevent the spread of disease, or 17,161,680 schools for girls in developing countries.
A 2018 report from the charity Crisis predicted homelessness in the UK could be solved within 10 years with a £10 billion donation. As well as helping the“236,000 people in England, Scotland and Wales living on the streets, in cars or tents, in shelters or unsuitable temporary accommodation”, it would include building at least 100,000 social homes every year for 15 years, and supporting prisons and hospitals to prevent people leaving those institutions becoming homeless.
The UN’s Food and Agriculture Organization estimated ending world hunger would cost $30 billion. The NHS crisis is never far from the news, and in January 2018, Conservative MP Dominic Raab, Secretary of State for Exiting the European Union, said: “It needs, urgently, about £4 billion a year”. While unsubstantiated, these figures demonstrate the effect similar sums could have on some of society’s biggest issues.
It’s hard not to expect larger contributions from the wealthy, while low-income families are giving relatively more, but rather than creating another type of ‘tax’ (which has a less charming spin than charitable giving), let’s encourage philanthropy and distribute resources appropriately.