For some time I have been trying to understand why Australia’s wealthy give so little to charities when compared to their counterparts in the UK, US and Canada and when compared to normal, average Australians.

Just to be specific, from research our foundation has funded over the past seven years it seems that the average wealthy American allocates about 14.5% of their wealth to charity and the best guess we have is that the average wealthy Australian allocates less than 1% to charity. For Australians on the average wage it seems they allocate 2%-3% to charity … So some nice, normal Aussie is allocating three times the amount of their wealth to charity when compared to our most wealthy … Why is this so?

Below are the most often proffered excuses I have been given by wealthy people, justifying their appalling lack of generosity and complete lack of a social conscience. None of this is made up.

1) It’s the government’s responsibility

While our governments are responsible for providing a social safety net, blind Freddy can see that more needs to be done and governments can’t be expected to meet the needs of all those in society that require help.

2) Our taxes are too high. If they were lower I would give more.

OK, so first our taxes are not high. When compared to the OECD average (including all levels of tax paid) you find (surprise, surprise) that Australians actually are not that highly taxed and in fact we are pretty much in the middle of the pack … Further as net taxes have come down over the years we have seen no material increase in the general giving from our most wealthy. So this is a myth on two counts.

3) I pay my taxes, etc, etc (revert to point one)

Most of the very wealthy that I know do not pay anywhere near either the full marginal tax rate nor the full company tax rate. Their affairs are structure through trusts, locally and overseas thus minimising their tax dramatically … So again the average Aussie is paying a higher tax rate than our wealthy.

4) Charities are so inefficient. If they were more efficient I would give more.

Charities are perhaps slightly less efficient than businesses. This is often due to a lack of funding available to fund the infrastructure of the charity. When money does come in the donors more often that not want the money to go directly to the cause and do not want money to go to “admin” or “infrastructure”. Yet without well-funded administrative resources and services, charities will continue to be somewhat inefficient in their delivery of services … So just give more!

5) I worked hard for this money … and it is mine (this is one of my favourites)

Let me start with a quote from Warren Buffet.

“My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it services our country well … I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate’s distribution of long straws is wildly capricious”

I have worked hard all my life (OK, so perhaps not so hard the past few years) but I have never felt my effort was greater than that of the wonderful doctors or nurses I meet at the Children’s Hospital at Westmead nor the many wonderful teachers I have met through our daughters’ schooling, nor the shopkeepers whose businesses I interact with.

Specifically, can an investment banker that made $8 million (because he “helped” convince one large company to buy another large company) really believe this remuneration is justifiable compared to (say) the pediatric surgeon who just operated on (and saved the life of) a baby … where the surgeon may be earning about $200K … Does the “I worked hard” bullsh-t really hold water when you compare how financial rewards in our society seem to go not to those that provide society with the greatest benefits but rather to those who make money for others!.

You worked no harder than most of the population but ended up with more money than most. Just be thankful that this is how our society works, give more to charity and going forward perhaps be a little more humble.

6) I might need this money later in life

This came from a guy with investment assets of more than $500 million. Someone whose regular giving is of the order of $10,000 a year … His specific concerns seems to be medical … What if he gets sick when he is older … Gee, tough one … However I am guessing that you could meet your future medical needs with a lot less  than $500 million.

7) I do give but in a quiet way …

This is the great urban myth of Australian philanthropy. Some would have us believe that our wealthy are backing the trucks up daily to needy causes all over the country, flooding their coffers with gazillions but only on the premise that nobody leaks information on the amazing acts of philanthropy …

Some wealthy do give anonymously, however if there was this across-the-board flood of large donations (given anonymously) then the money would appear in the statements of the major charities … Guess what the statements do not show that this is occurring? Why? Because it is not happening … For the most part our wealthy are not giving large donations either quietly or with the accompaniment of a full orchestra, brass band and marching girls.

8) When I was on my way up, the press kept having a go at me … Now that I have money … bugger them … I am keeping it.

So let me get this right …

For whatever reason some journalists have at some time written pieces critical of you while you were building your career. Now that you have made your pile you feel the appropriate response is to not give money to charity. Where is the connection? It may well be that the journalists were not justified in their attack and you have been mistreated but this does not now give you a leave pass from your responsibility to give back to the broader society. OK. Make a stand. Do not donate to any journalists’ retirement home but I am pretty sure there are other causes, not related to journalism or the media, that you could give your money to.

9) I already give to society. I run a business and employ people.

This little beauty is often trotted out by sycophants of the rich and powerful. Somehow in their twisted, parallel universe the building of a business (which requires the hiring of people) is a charitable act … For most I am pretty sure that they built their business to make money and as part of the building their business they needed to hire people to do stuff. Employment was not a charitable act but rather a way for them to make (more) money. To suggest that hiring people is some form of social giving is really bizarre.

Most of the rich people I have met became rich either through (as Buffet suggests) being members of the “lucky sperm club” (i.e. having money passed down to them) or they have built businesses. The business builders have done so through a mix of smarts (street or intellectual or both), a strong work ethic, highly tuned competitive approach and focus. Generally they are people you would consider at best reasonably talented and at worst not stupid.

So why, when asked about their lack of giving to charity, do they come out with such a range of fundamentally flawed answers. Answers that are easy to bat back. Answers that do not bear up under the slightest scrutiny … How can people who are so smart for most of their day seem so stupid when it comes to justifying their greed.

My sense is that for most of our wealthy money embodies everything they want to be. With money they now have access to people they would not previously had access to. With money people treat them as special (car companies. airlines, hotel, restaurants, shops, etc). With money people assume they have qualities such as wisdom, compassion and a level of intellect that may not in fact exist … In short because they have a lot of money they are treated as special, better than the rest … Therefore anything that diminishes the pot of money in some way diminishes how special they are …

En masse our wealthy are not necessarily, smart, wise, compassionate, caring, clever, nice or worth spending any time with. They are just rich.

They do, however, have a responsibility to give back generously to the society that provided them the platform from which they made their pile. It should not be a choice but a responsibility and society should expect our most successful/lucky to contribute their fair share. Quite simple really.

This first appeared on the Irregular Rant blog site.