Patrick Dwyer Financial Advisor on Why the Rich Are Philanthropic

For Patrick Dwyer financial advisor, understanding why rich people give to charity is something that has always personally fascinated him. Living in Miami, he encounters all of the seven recognized faces of philanthropy and understands that people give for different reasons. However, when asking regular individuals why they feel the rich give to charity, most will believe their motives are less than altruistic and are more likely to be related to not having to pay tax.

Patrick Dwyer Financial Advisor on Distrust of Donor Motivations

The gap between the rich and poor is becoming increasingly big and more people now live in the poorer realms of society. As a result, people see the wealthy as “dodgy donors”, a label that would never be assigned to someone of lower or middle class who wants to make a donation. However, even the wealthy have important drivers towards being philanthropic and, while there will certainly be some dodgy motivations out there, the majority do so because they genuinely want to give.

Donations do have interesting tax incentives. However, those incentives are available to everybody, regardless of their income level. Additionally, people have no control over how the tax they pay or don’t pay is spent, just as that they don’t have a choice when it comes to how much tax they have to pay. Hence, claiming that wealthy people donate to charity solely for tax purposes is neither true nor fair.

Rather, it seems that the majority of wealthy individuals give to charity because they have a personal affinity with a certain charitable cause. They help to recycle resources within their own group, in a sense. Poor people, for instance, are more likely to donate to homeless charities and other organizations that help the poor. Wealthier individuals are more likely to give to educational and medical charities, which generally have an impact on their personal social class as well.

Additionally, while the rich often seem heartless to those who are not in that income bracket, they are people too. And this means that their reasoning for giving is very similar to that of poorer individuals: they are passionate about certain causes and they want to help resolve specific problems. Indeed, research has shown time and again that tax incentives are not really a driver in terms of who wealthy people donate to, although they do matter. It seems, however, that the rich are more concerned with the fact that being philanthropic is something they want to do and feel they are expected to do.

There are different types of philanthropists and they have different motivations for giving. Some do so because they, themselves, came from poorer backgrounds and feel they know where help is needed to fight poverty. Others do so because they experienced certain medical conditions in their family and want to support finding a cure for those. Others do so because they believe it is God’s will for them to do it. The list is endless but tax breaks does not feature very highly on it.

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