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‘No link between government spending and taxation on giving’ says CAF international analysis

‘No link between government spending and taxation on giving’ says CAF international analysis

Research into charitable giving in 24 countries by the (CAF) has found no significant link between governments’ expenditure and taxation measures and the amount people donate to charity.

The new international data analysis is published today in ‘Gross Domestic Philanthropy: An international analysis of GDP, tax and giving’, which examines some of the factors affecting any links between GDP and charitable giving.

The analysis focuses on countries that together account for around 75% of global GDP and 53 % of the world population.

CAF's Gross Domestic Philanthropy report cover

Cover of 16-page ‘Gross Domestic Philanthropy’

The report looks at measures including:

  • overall tax burden
  • top tax rate
  • average income tax
  • corporation tax
  • government expenditure as a percentage of GDP
  • employer social security charges.

CAF found that only employer social security charges appeared to show any correlation with charitable giving in the counties examined.

Donations as proportion of GDP

Chart showing charitable giving by individuals as percentage of GDP - source: CAF

Charitable giving by individuals as % of GDP (Source: CAF, 2016)

The report reveals that the top four countries giving the largest proportion of their GDP to charity are:

  • United States of America (1.44%)
  • New Zealand (0.79%)
  • Canada (0.77%)
  • United Kingdom (0.54%).

In Europe the top countries in terms of donating a proportion of GDP are:

  • United Kingdom (0.54%)
  • Italy (0.30%)
  • the Netherlands (0.30%)
  • Ireland (0.22%)
  • Germany (0.17%).

Adam Pickering, international policy manager at CAF, said about the findings:

“Across the 24 nations we studied, we found no significant link between government spending, income or corporation tax and the proportion of GDP donated by individuals.

“This suggests the relationship between the amount of taxes people pay and the amount they give to charity is not as clear-cut as some may have thought. The factors which motivate people to give, and influence how much they give, are incredibly complex”.

CAF last examined charitable giving as a percentage of GDP in 2006 when it looked at data from 12 countries.

World Giving Index

The new findings do reveal a positive correlation with the recorded levels of giving across these 24 countries as a percentage of GDP and levels of participation among those living there who say they have recently donated money, volunteered time and helped a stranger, as reported in CAF’s sixth annual World Giving Index, published in November 2015. This looked at three ‘giving’ measurements in over 140 countries.

 

 

Howard Lake is a digital fundraising entrepreneur. Publisher of UK Fundraising, the world's first web resource for professional fundraisers, since 1994. Trainer and consultant in digital fundraising. Founder of Fundraising Camp.

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