Monday, February 04, 2008

Giving Makes You Richer

Syracuse University professor Arthur C. Brooks was sick of hearing entrepreneurs claim that a secret to their success was their generosity in giving to others. He said: I decided to test this and prove the theory was incorrect, so the next time an entrepreneur told me that part of his or her success was due to their giving, I could say, “I actually tested that, and it’s not correct.” It turns out the joke was on me. I’m going to show you how wrong I was, why I think it matters, and how it changed my understanding of charitable giving.

When Brooks first found a causal relationship between donating to charity and earning higher incomes, he was dumbfounded. He literally threw out his findings and started from scratch with a new data set. When his research kept resulting in the same outcome, he had a change of heart. Below are several quotes from a lecture Brooks gave on October 16, 2007, as part of the George W. Romney Distinguished Lecture series. Click here for a reprint of the speech.

Last year Americans privately gave $295 billion to charity. That’s more than the entire gross domestic product of all but about twenty-five nations in the world.

John D. Rockefeller was famously quoted as saying in 1905, “God gave me my money to use as I see fit for the benefit of my fellow man.”

[T]here are two reasons for the success of people who donate: (1) giving changes givers and makes them more effective; and (2) giving changes the perception other people have of givers, and that also makes them more successful.

“For unto whomsoever much is given, of him shall be much required” (Luke 12:48)

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