Ever given to charity? You probably have. Most people are kind and generous.
They have feelings when they see bad things happening in the news, or maybe they have a family member who is sick, or perhaps they support a local group that’s getting things done. They dig deep and give.
But not everyone is like that. The Australian Taxation Office (ATO) just put out a huge chunk of data on the donations people claimed in 2019/20. It shows some dig a lot deeper than others.
First, let’s have a look at CEOs. The chart below shows what proportion of the profession gave to charity, broken down by tax bracket and gender (men are triangles, women are circles).
The chart tells us the higher the tax bracket, the more likely you are to give.
Women are more likely to give at every level, but among CEOs, charity is a niche pursuit: most CEOs do not give to charity and hold on tight to the money they make.
Is that rare? Are CEOs generous? Let’s see how they stack up against the humble garbage collector.
The next chart has the results for rubbish and recycling collectors (blue) as well as CEOs (red). Surprise! The median garbo is more likely to be a generous soul than the median CEO, while the top and bottom of the earning scale are roughly a tie.
On balance, it’s a win for the garbage collector. The other interesting thing about this group is that the men (triangles) are more likely to be generous than the women. That’s rare.
Of course, the size of the donation is another story. The garbage collector might be giving $2 while the philanthropic CEO might donate $2,000. Let’s have a look.
The next chart reveals CEOs gave a lot more. It also shows one of the paradoxes of this analysis: some people with low taxable incomes, who will not have had to pay income tax, made very large charitable donations.
While 99 per cent of people in low tax brackets make very little money, a small share of them actually make a lot of money but have a lot of tax deductions that reduce their taxable income. That seems to be the case for some of the male CEOs who had taxable income under $18,200.
When you make a donation, you can subtract the amount you gave from your income before you pay tax.
For example, if you make $90,000 and donate $75,000 to charity, you keep $15,000 and won’t have to pay tax on that remaining money. It’s like you only made $15,000 in the first place.
You can never get a personal tax advantage by donating – you’re not “cheating” – but you can favour your own preferred charities over the tax office, if that makes you happy.
While most people with low taxable incomes run small or unsuccessful businesses, some are well-paid CEOs of big companies who donated vast sums in 2019/20 to reduce their taxable income to almost zero. (We don’t see the rubbish man following this strategy.)
CEOs and garbos are just a fun comparison though. They are not the tightest nor the most generous with their philanthropy. So, who is?
Aprons and epaulets
The answer to the question of tightest may cause you to rethink your next tip. The profession giving the least to charity is waiters.
The following chart depicts their miserly ways. Less than 10 per cent of rich, male waiters gave money to charity.
Police, meanwhile, are at the other end of the scale, with almost 70-80 per cent of top-earning officers giving money to charity.
Lastly, here’s a handful of professions from across the spectrum and how likely they are to donate.
Surgeons are our nation’s biggest earners, on average, but they are near the middle regarding donations.
Sportspeople are also inclined to save their money, while politicians (legislators) do surprisingly well. It’s nice to see them giving donations, not just accepting them.