At times, it seems that philanthropy and government support are two sides of the same coin, with the only difference being origin: one comes from the largesse and civic-minded spirit of private individuals, while the other is borne of societal obligations and the social contract.
Yet the two are inextricably linked, for better or worse. An intricate, tangled network of incentives encourages the rich to engage in social spending, including tax breaks, deductions, and deferments. What is less clear, however, is whether this relationship is a zero-sum game: in nations with strong social safety programs, are philanthropies and charities less common? What about nations where the inverse is true?
In fact, in nations with robust social programs, private philanthropy is not seen as an end-all to social problems. Conversely, in nations that often lack such safety nets, charity seems to take on an important, nearly outsized role. Let’s take a look at two areas to learn more: the United States and several Scandinavian nations, specifically Sweden and Norway.
The far northern nations of Scandinavia have long been known for their civic spirit and social support. While it is true that Swedes, for instance, pay some of the highest income taxes in the world, their safety net is quite impressive in terms of benefits, standing as a model to left-wing reformers across the world, from Bernie Sanders in the United States to Jeremy Corbyn of Britain.
Yet for all their taxes, citizens of Sweden seem to receive a lot in turn. College tuition, childcare, health insurance, housing support, and many more benefits (which are often paid in nations like the United States) are free. New parents, father and mother alike, can take over a year (480 days) for paternity leave, among the most generous programs of its kind in the world.
At the same time, the Swedish economy is performing well, disproving the old canard that high taxes and generous benefits will lead to equally high unemployment. In fact, Sweden, alongside Scandinavian neighbors like Norway and Denmark, also has high employment rates; it seems that perks like subsidized public transit, cheap or free educations, and readily available childcare all encourage people to find, and keep, work.
Given this state-sponsored generosity, one might think that Swedes give less to charity–and they would be correct to an extent. In the World Giving Index, an annual report produced by the Charity Aid Foundation, Sweden is ranked 34th of 139 nations. It’s a respectable score, perhaps, but seemingly low for an OECD nation. This score was also down from years past, despite headlines exclaiming that Swedish citizens donated more money (in terms of amount) than ever before. Still, it’s an improvement from 2011, when Sweden ranked 45th of 139th on the World Giving Index.
In contrast, America ranked 5th of 139 nations on the World Giving Index. Yet in and of itself, this shouldn’t be so strange. After all, conservative elements in the United States often turn to private organizations for social relief, distrustful as they are of big government. In fact, many religious organizations seem to be stepping up, including churches, mosques, and synagogues, to fill in the gaps in America’s social welfare programs.
Whether such groups will successfully be able to extend their philanthropy to cover wide segments of the population is an open question. However, Americans do seem very generous in their private lives–especially religious Americans. Up to 83 percent of congregations have some sort of help program in their communities, with most congregations averaging about $1,500 in spending.
But it may also be the case that America offers more incentives for the well-off to participate. For one, the charitable contribution deductions offered by the Internal Revenue Service are extremely extensive. Bear in mind too, that this is before you reach individual states and municipalities, many of which also have additional laws that privilege giving.
In conclusion, it certainly does seem that where social safety nets are weak, private individuals step into the mix. On the other hand, when social welfare is built into the system of governance, charity seems to be more of an afterthought: why donate if the state will take care of you? More importantly, why donate if you don’t receive a tax break?
This isn’t to say that one way is better than the next. Instead, it’s a matter of philosophy and perhaps preference, if on a large scale: who does one trust to help out the less fortunate? Big government? Or well-off, civic-minded individuals?
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