Why the rich give money to charity
Some do it for tax breaks and public recognition. But happiness, rather than self-interest, is a prime motive.
New York City Mayor Michael Bloomberg gestures as he speaks during the 2010 meeting of the Wall Street Journal CEO Council in Washington, November 16.
Jonathan Ernst/Reuters
New York
With billions of dollars swirling around a global charitable ecosystem, experts are trying to pinpoint, with scientific precision, why people give. Call it CSI: Charity.
Take, for instance, this statement from New York City Mayor Michael Bloomberg. "We're put here on this earth to share and to help each other," he said during an August press conference. "And nothing I will ever do – or you or anybody else that's generous – will give you as much pleasure as you get when you look in the mirror just before you turn off the light and say, 'Hey, you know, I'm making a difference.' "
Are the roots of giving, in the end, personal satisfaction and happiness, in addition to the more pragmatic reasons of tax relief and recognition? If so, can charities figure out how to maximize the amount people donate?
RELATED: Forbes: The richest men in the world
Scholars, using the quantitative language of science, note a "diminishing margin of value" in the relationship between wealth and happiness. The more money a person has, the less power money has to influence happiness. While this simple truism is the stuff of pop songs and novels, classic economic theory often ignores the elusive concept of the pursuit of happiness.
