Comparing Charitable Giving of Clinton and Obama

April 4, 2008

Hillary Clinton has now released her and her husband’s tax returns for the past seven years, and the campaign is touting the amount of charitable giving that the family contributed over that period. Much of it goes to the charity Clinton Family Foundation. An economist may ask the question, “What fraction of that is actually consumption, given that the Clintons obviously gain utility from having their name associated with the foundation?” Why wouldn’t they just donate some money to the Bill and Melinda Gates Foundation, for example, or some other charity? If you buy Girl Scout Cookies, you cannot claim that $3 as a charitable deduction for tax purposes because you were given a good (delicious cookies) in return for the money you gave the organization. Similarly, when somebody donates $10 million to a university to have a building named after himself (or to a charity named after himself), isn’t that person getting something in return too?

On a less theoretical note, people often ask how the candidates’ charitable giving compares to others in their income groups. We’ve put together a table using IRS data on charitable giving for those in similar income groups as Obama and Clinton for tax years 2000 through 2006.

Tax Year Obama Charity Clinton Charity Obama AGI Clinton AGI Obama % to Charity Clinton % to Charity Obama’s Cohort % to Charity Clinton’s Cohort % to Charity
2006 $60,307 $1,580,503 $983,826 $15,858,422 6.13% 9.97% 2.99% 6.21%
2005 $77,315 $1,755,473 $1,655,106 $18,056,395 4.67% 9.72% 3.50% 6.21%
2004 $2,500 $2,534,280 $207,647 $19,995,915 1.20% 12.67% 2.89% 6.71%
2003 $3,400 $410,000 $238,327 $7,934,705 1.43% 5.17% 2.92% 4.53%
2002 $1,050 $115,000 $259,394 $9,466,632 0.40% 1.21% 2.90% 4.40%
2001 $1,470 $807,585 $272,759 $15,949,819 0.54% 5.06% 2.77% 6.52%
2000 $2,350 $34,900 $240,505 $357,026 0.98% 9.78% 2.76% 2.76%
Total $148,392 $7,237,741 $3,857,564 $87,618,914 3.85% 8.26% 2.88% 5.13%

Note the following:

Cohorts were defined by the following AGI groups courtesy of IRS Statistics of Income Tables: 200-500k, 500k-1m, 1m-1.5m, 1.5m-2m, 2m-5m, 5m-10m, 10m+.
Cohort data includes only those tax returns that itemize, which in these income ranges is a large fraction.
2006 numbers were estimated using 2005 data from the IRS, which is the most recent.
Totals were not adjusted for time value of money or inflation.
Annual income is not a perfect indicator of one’s ability to pay taxes or ability to give to charity in a given year. Accumulated wealth and expected future wealth can also play a factor.

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