A Good Day to Hail Good Ethics

We spend most of our time on this blog pointing out ethical lapses, but let’s use America’s birthday to celebrate a very important collective good deed:  Charitable donations are at record highs since the start of the pandemic.

It’s heartening to note that when the coronavirus shut down the economy, leaving millions without jobs and in desperate need, Americans stepped up to help, setting records in both the number and size of contributions.

While much of the increased giving has come from foundations, companies, and institutions, a great deal has also come from individuals. Exact numbers are impossible to calculate at this point, but grants to food banks and other safety net programs, were up 667% as of June. Thirty-two community foundations that reported their giving to June provided more than $200 billion. And Fidelity reported that donor-advised funds (a tax-advantaged charitable-giving tool for the wealthy) have given $3.4 billion, up 28% from 2019.

This is a reversal from 2018 and 2019, when charitable giving declined after the 2017 tax cut act eliminated the tax deduction for millions who no longer had the incentive to itemize. Congress reversed some of that damage in the CARES Act by loosening rules for large donations and by permitting a deduction of up to $300 for those who don’t itemize.

There’s still a lot more to be done. One survey shows that America’s 50 richest people have together donated $1 billion to coronavirus relief, just 0.1% of their net wealth. And with cases of the virus surging and some states going back into lockdown, it’s obvious the need for assistance is going to remain high for some time to come.

When It’s Unethical To Be Thrifty

In a recent post, I suggested that people who receive a government stimulus check even though they are not suffering any economic hardship should try to donate the money to charities overwhelmed by those who have lost jobs and income. When asked a related question, The New York Times Ethicist, Kwame Anthony Appiah, suggested those who can should spend more to stimulate the economy and resist the urge to be thrifty despite these uncertain times. (See the second question in this column.)

Now there is strong evidence, that those most able to spend are pulling back, just when low income workers need the economic jolt the most. Please take the time to examine their research here.