It\u2019s an honor for me to be here at Brigham Young University, and it\u2019s a delight for me to be here in beautiful Provo. The last time I was here was in the fall of 2007. I have happy memories of my last visit, and I have great anticipation of my next. I\u2019m always delighted to be here, and I can see why statistics show that Utahns are some of the happiest people in the United States. It\u2019s quite clear, just by looking around, why that would be so.<\/p>\n
I\u2019m going to talk to you today about something that you\u2019ve probably given a lot of thought to: charity. But I want to talk about it in a way you maybe haven\u2019t thought about it: about how you can use it in your lives and in the lives of others. I want to talk to you about how charity can and should prominently figure in the lives of Christian people\u2014but in a way that maybe hasn\u2019t quite occurred to you before. I want to start with a quote from the famous industrialist John D. Rockefeller from 1905.<\/p>\n
Rockefeller was famously quoted in that year as saying, \u201cGod gave me my money\u201d (in Reo Bennett, \u201cHow the Richest Man in the World Observes Christmas,\u201d Woman\u2019s Home Companion,<\/i> December 1905, 14). Now, that\u2019s sort of troubling to Christian people. God gave<\/i> him his money? Some have used the quote as evidence that John D. Rockefeller was a bad man\u2014that he believed he deserved to be rich when other people were poor. But that\u2019s not actually what he meant.<\/p>\n
In 1906 Rockefeller went on to tell a newspaper reporter for the New York American:<\/i> \u201cI believe the power to make money is a gift from God . . . to be developed and used to the best of our ability for the good of mankind\u201d (to William Hoster, quoted in Jules Abels, The Rockefeller Billions: The Story of the World\u2019s Most Stupendous Fortune<\/i> [New York: Macmillan, 1965], 279\u201380).<\/p>\n
What Rockefeller meant was this: He believed that he made money because he was charged with helping others with his money, and he honestly believed (as he wrote at other times) that if he stopped giving his money and giving it in the right way, then God would take his money away.<\/p>\n
Now, that still might trouble you theologically that God would intervene in the direct finances of John D. Rockefeller, but you have to admit that it doesn\u2019t sound so weird at that point. John D. Rockefeller believed that he was rich because he gave so much, and throughout his life, before he was a rich man, he gave a lot. He was a charitable person.<\/p>\n
A lot of entrepreneurs believe that one of the reasons that they\u2019re rich is because they give. Entrepreneurs in this country are some of its most charitable citizens. And I\u2019ve always heard this, because for years I taught in a department of entrepreneurship, so I got to know the modern John D. Rockefellers who thought that they were rich partly because they gave. But, you know, I never believed it\u2014never believed a word of it\u2014because I was trained as an economist.<\/p>\n
A lot of you have taken classes in economics. When you walk into your first class in economics, here\u2019s what the professor doesn\u2019t say: \u201cYou want to get rich? Give all your money away.\u201d That\u2019s not the advice you hear. It doesn\u2019t make sense. No, you have to have money first, and then you can give it away. That\u2019s what economists like me think. So I set out to test John D. Rockefeller\u2019s view that he was rich because he\u2014and all the other entrepreneurs I talked to\u2014gave. That way, the next time I heard somebody say that you could get rich by giving your money away, I was going to respond, \u201cNo, you\u2019re wrong. I have the data that say you have to have it before you can give it away.\u201d<\/p>\n
Well, I\u2019m going to tell you what I found, and in a nutshell what I found was that Rockefeller was right and I was wrong. I\u2019m going to show you the evidence that proves how wrong I was and tell you how you can use this information in your life and how I\u2019m using it in mine.<\/p>\n
But first a little background on charitable giving in America: Americans give. Americans give a lot. In 2006 American citizens privately gave about $300 billion away to charity. Now, $300 billion\u2014is that a lot, or is that a little? Who even knows these days? The president with the stroke of a pen could give away three times that to people who cannot pay their mortgages, for all we know. It\u2019s a crazy time out there, but to put it into perspective, $300 billion is more than the entire national income of Sweden. We give away to charity more than the whole country of Swedes makes in income. That\u2019s a lot of money. Seventy-five percent of America\u2019s families give every year. Fifty percent volunteer their time, and many Americans give in myriad other ways that are not captured in data.<\/p>\n
At one point when I was teaching about this subject, I decided to figure out who in America is the most charitable. I compared states, and you are not going to be very surprised at what I found. The most charitable state in the United States, of course, is Utah, where people give approximately twice as much as the second leading state in charitable giving. So congratulations to you. I\u2019m tempted to say that that should make Utahns proud. But I suppose that\u2019s not the right word. You should be pleased\u2014and determined to keep it up.<\/p>\n
Now, given this, one often asks, How do Americans compare in charitable giving with people around the world? There\u2019s a perception out there, if you listen to politicians, that we\u2019re stingy. Jimmy Carter, the former president of the United States, said in a relatively recent speech that Americans are indifferent to the suffering of the poor around the world: \u201cThe problem lies among the people of the U.S. It\u2019s a different world from ours. And we don\u2019t really care about what happens to them\u201d (16th Annual Nobel Peace Prize Forum, 21 February 2004, St. Olaf College, Northfield, Minnesota).<\/p>\n
The data say that President Carter is wrong. If we look at how much money Americans give per capita compared to citizens in other countries of the world, we will find that the average American citizen gives away three-and-a-half times as much money each year as the average French citizen, seven times as much as the average German, and 14 times as much as the average Italian.<\/p>\n
Now, as an economist I want to know whether or not that\u2019s because we are richer. However, when you correct for income differences and tax differences and all the things that make the United States a different country, you find that the gap doesn\u2019t close. This is an authentic difference in culture\u2014once again something I do believe we can be quite pleased with. The questions, then, are why does it matter and which is pushing and which is pulling? Is the fact that we\u2019re, generally speaking, a richer country the reason that we give so much, as I\u2019d always thought? Or is what John D. Rockefeller would have said true: that the fact that we give so much is one of the secrets to our success?<\/p>\n
That\u2019s what I set out to show. I set out to show that Rockefeller was wrong: that you have to have the money before you give it away, that we all need to go to work, and that we need tax policy that puts plenty of money in our pockets\u2014then we\u2019ll help each other. That\u2019s what I intended to show.<\/p>\n
The way I set out to show that was by gathering data on 30,000 American families from all over the country. Actually, colleagues at Harvard University collected the data in the year 2000. Working from coast to coast, they collected the data from 41 communities big and small and towns north and south. Salt Lake City was one of the communities we looked at. We also looked at Washington, D.C., and Seattle, Washington (my hometown)\u2014lots of places were in there. Thirty thousand families were asked questions about how much they gave, what they gave to, how much money they made, their education, their family life, and everything in between. It was the most comprehensive look at people\u2019s service behavior and their charitable giving that we\u2019ve ever had before, and I eagerly anticipated these data because I was going to show what I\u2019d always thought. This was going to give me a statistical way to show that you have to have the money first.<\/p>\n
So I charted it up and did the statistical analysis. I worked for months with my computer in my darkened office to get my conclusion. The conclusion was, sure enough, that when people get richer, they tend to give more money away. But I also came up with the following counterintuitive finding: When people give more money away, they tend to prosper.<\/p>\n
Specifically, here\u2019s what I found. If you have two families that are exactly identical\u2014in other words, same religion, same race, same number of kids, same town, same level of education, and everything\u2019s the same\u2014except that one family gives a hundred dollars more to charity than the second family, then the giving family will earn on average $375 more in income than the nongiving family\u2014and that\u2019s statistically attributable to the gift.<\/p>\n
Now, when I got this I was perplexed. I was really confused because it didn\u2019t go with my theory. In psychology this is what we call cognitive dissonance\u2014two competing ideas in conflict with each other. On the one hand I had the theory that I\u2019d always worked under. On the other hand I had data that completely contradicted the theory. So I did what college professors always do in this case: I got rid of the data. I said, \u201cThat can\u2019t be right. I\u2019ve obviously messed something up.\u201d I got new software. I looked for new data. I recrunched the numbers. I kept coming up with the same thing.<\/p>\n
I ran the numbers again, and I looked at volunteering. I found the same thing: People who volunteer do better financially. I ran the numbers on blood contributions and blood donations. Think about that\u2014giving blood. You\u2019re not going to get richer if you give blood, are you? Well, yes, you are.<\/p>\n
I figured it couldn\u2019t be right, so I ignored the findings. I didn\u2019t publish them. I let them roll around in my head for a long time. And I thought, you know, I\u2019ve got a better way to test this\u2014I\u2019m going to look at the whole United States. I wanted to see how charitable giving had changed over a 50-year period and compare it to how income had changed. Then I could see which was statistically pushing and which was pulling.<\/p>\n
I examined the average family between 1954 and 2004 and found (adjusted for inflation) a 150-percent increase in real purchasing power. This is great news. This is actually an amazing thing worldwide. You simply don\u2019t see growth like this in real purchasing power in already rich countries. It\u2019s an incredible achievement that the United States has undertaken. This is a testament to prosperity that comes from productivity and hard work and dedication. This is a good thing.<\/p>\n
Charitable giving also increased over the same period per family on average by 190 percent. And this is an even better story because what this says is that we\u2019re getting more prosperous in this country, but we\u2019re getting even more generous over time. I\u2019m pleased with this result. It tells me once again that what Jimmy Carter said about this country is not right. We\u2019re not a stingy country. Could we be more generous? Of course we could. But we\u2019re not getting stingier.<\/p>\n
Here\u2019s the real question: Which is pushing and which is pulling? Is income driving up donations or are donations driving up income or what? And the answer, once again, is both. You find that when our country gets richer, people do give more away. And as we give more away, that translates into better economic growth for this country.<\/p>\n
Statistically what we find is that if we were to increase our private charitable donations by just 1 percent, which is about $2 billion a year\u2014$2 billion a year from people like you and me writing checks for our favorite causes: our churches and our favorite charities\u2014if we just did that, that would translate into a gross domestic product of about 39 billion new dollars. That\u2019s a great multiplier.<\/p>\n
Now, $39 billion by today\u2019s stakes is nothing. The president pulls $39 billion from behind the cushions of the couch at the White House. It\u2019s laundry money. It\u2019s three months in Iraq. It\u2019s 5 percent of the stimulus package. It\u2019s nothing. But it\u2019s a great multiplier. If I can take your $2 billion in charity and turn it into $39 billion, then suddenly charitable giving is not just a great investment for you. It\u2019s also a patriotic act for our country because it translates into jobs and growth and opportunity and tax revenues and all the stuff that we really like.<\/p>\n
The more I ran the numbers, the more I kept getting this crazy result. I kept getting the same thing over and over and over. Rockefeller was right, but I still refused to believe it. So in desperation I finally went to a colleague who specialized in the psychology of charitable giving, and I said, \u201cI\u2019m getting this result I can\u2019t understand. It doesn\u2019t make sense. It\u2019s like the hand of God or something on the economy, and I can\u2019t believe it\u2019s true.\u201d<\/p>\n
And the first thing he asked was, \u201cWhy don\u2019t you believe it\u2019s true? You\u2019re a Christian, aren\u2019t you?\u201d<\/p>\n
This shook me a bit, but just for a second. \u201cYeah, but I\u2019m a social scientist,\u201d I shot back. \u201cWe\u2019re not supposed to believe those things. I need a more earthbound explanation.\u201d<\/p>\n
\u201cWell, I\u2019ll give you one,\u201d he said. \u201cWe\u2019ve known this for 30 years in the psychology profession.\u201d<\/p>\n
And I said, \u201cWell, tell me, tell me.\u201d<\/p>\n
He said, \u201cWe haven\u2019t just been talking about money. You economists\u2014you worry about money all the time, and money is boring. We worry about something that people really care about\u2014the currency by which we really spend our days\u2014and that\u2019s happiness. We\u2019ve known for 30 years that people who give get happier as a result. Can you use that?\u201d<\/p>\n
And I said, \u201cOh, yeah.\u201d Because I know from teaching at a business school that the best way to run a successful business is to hire happy people. That\u2019s really where the action is. Some of you know that too. If you want to have a productive business and if you want to be a productive person, work on your happiness. Happy people show up for work more, they work longer hours, they work more joyfully, and they\u2019re happier with every aspect of their productive lives. Happiness is the secret to success, and if that\u2019s true, I\u2019ve got the answer. Charity brings happiness, happiness brings success, and now I\u2019m onto something.<\/p>\n
It turns out that the data on happiness and charitable giving are beyond dispute. People who give to charity are 43 percent more likely than people who don\u2019t give to say they\u2019re very happy people. People who give blood are twice as likely to say they\u2019re very happy people as people who don\u2019t give blood. People who volunteer are happier. The list goes on. You simply can\u2019t find any kind of service that won\u2019t make you happier.<\/p>\n
Laboratory experiments using human subjects find that when people are asked to give to other people, it elevates their mood. Furthermore, if you increase your level of charitable giving, you can permanently alter your level of what psychologists call positive effect\u2014which is to say, being in a good mood. You can be a happier person that way. It\u2019s the secret, basically. The real question is not whether that\u2019s true; the question is why that\u2019s true.<\/p>\n
There\u2019s a very interesting set of studies that tell us why it is that giving will make you into a happy person. The first has to do with how it changes your brain. I\u2019m going to explain that in a minute. The second is what it does to how other people treat you. Let me explain. The first is that the wiring of our brains is conducive to charitable giving, and it works something like this. In the late 1980s there was a famous study of charitable giving that looked at how people reacted with respect to the endorphins that they experienced. Endorphins are neurochemicals that make you feel a sort of euphoria. If you like to run marathons, it\u2019s probably because afterward you feel really good\u2014you feel sort of high in a way. Psychologists came forth with studies that showed that when people volunteer to help other people, they get what they call \u201cthe helper\u2019s high.\u201d Volunteering actually gives people a mild sense of euphoria.<\/p>\n
I think that\u2019s an interesting study, but it doesn\u2019t help me explain prosperity. The helper\u2019s high doesn\u2019t get me there, and the reason is this. When I was in high school I went to school with a lot of kids who specialized in getting high. And it turns out that that was not a secret to success. Now that I\u2019m 44 years old and keeping in touch with a couple of people from high school, I can assure you that the pathway they took was not the one to great prosperity. So it\u2019s interesting that you get this helper\u2019s high, but it doesn\u2019t help us explain all this worldly prosperity that I keep finding in my data.<\/p>\n
Later studies of the brain came up with a more compelling explanation. These studies showed that when people give, it lowers their levels of stress. This is really important to understand in prosperity because one thing that we know is that people who do their jobs with less stress tend to be more productive and more successful than those who perform it with more stress. You\u2019ll find throughout your lives that if you can find ways to relax, you will profit from this level of relaxation. Studies have shown that charitable giving will objectively lower the stress levels that people feel in their everyday lives.<\/p>\n
There is one famous study from the Duke Medical School in 1996. It\u2019s a study that I love because it\u2019s so strange. Senior citizens were asked in an experiment to give massages to infants, to little babies\u2014which is a funny thing. It just goes to show you that in the university community you can get tenure for doing anything. Of these senior citizens, half of them gave massages to infants and the other half didn\u2019t. The researchers monitored the stress hormones in the senior citizens\u2019 brains to see what happened.<\/p>\n
There are three stress hormones, for your information. (This is the kind of thing that, when you\u2019re like me and write books for a living, you find out about.) What are the three stress hormones? They\u2019re called cortisol, epinephrine, and norepinephrine. When somebody cuts you off in traffic or insults you or you get a D on an exam or something like that, those chemicals are lighting up your brain like a Christmas tree, and you\u2019re unhappy as a result because you\u2019re stressed out. What you want to do is go through life with less cortisol, epinephrine, and norepinephrine in your day-to-day life. And what they found in the study of the senior citizens was that those who gave the massages to the babies cut their stress hormones in half. Big finding! Their interpretation was that this is great advice for people who want to be more effective, and this tells us something about why people who give a lot as part of their regular lifestyles are going to be more successful.<\/p>\n
The second set of studies has to do not with what happens in your brain when you give but with what happens in other people\u2019s brains when you give. A study from the University of Kent in southern England was dedicated to figuring out how people see others who are givers. There is an experiment called a cooperation game in which people are gathered in a large room, given a little bit of money, and asked to contribute to a common fund. Then the researchers look in the common fund, double it, and pass it out equally among the participants. If you think about that game, the best thing for everybody to do is to put in all of their money and have it doubled. But if you\u2019re crafty, what you want to do is hold back all your money when everybody else puts in theirs and don\u2019t cooperate. That way you get your own money and<\/i> a chunk of everybody else\u2019s. That\u2019s the idea. And, as the experiment showed, there is always a proportion of people who opt to do so.<\/p>\n
Now, researchers have been studying this kind of thing for years. What made it interesting when the University of Kent studied it was this. There was a second phase in which people in the game who had witnessed each other cooperating in giving to each other were asked to break up into teams and elect leaders. What they found was that in 82 percent of the cases, the leaders who were elected were the biggest givers from the first phase.<\/p>\n
Their conclusion, a conclusion that has been verified in subsequent experiments, is that when people see strangers giving charitably, they recognize a leadership quality in those strangers. If people witness you as a giver, they will see a leader. Servant leadership is no joke, and it\u2019s a secret to success, whether you\u2019re looking for success or not. When people see you giving and cooperating and serving others, they will see in you a leader, or a future leader, and they cannot help but help you.<\/p>\n
There are many other studies that show that givers have better health and that givers are better citizens. It goes on and on. The bottom line is this: Givers are healthier, happier, and richer in this country\u2014and probably around the world. It gives us stronger communities; indeed, it gives us a more prosperous nation.<\/p>\n
The question for me now is this: Who gives the most? And who\u2019s getting all this benefit\u2014wonderful benefit\u2014for themselves and for their communities? Well, I told you before: people from Utah. But that doesn\u2019t get me far enough, because if you move across the border from Idaho you are not suddenly going to start coughing up to charity. You\u2019re just not going to do it.<\/p>\n
There is something else going on, and you know what it is. It\u2019s practicing faith. The number-one characteristic of those who give in this country is that they practice a faith. Of people who practice their faith regularly\u2014which is to say, they attend worship services every week\u201491 percent give to charity each year. Of people who don\u2019t attend every week, 66 percent do. This translates into millions and millions of people who are healthier, happier, and more prosperous than their neighbors, and it charts back to a lot of their religious experiences.<\/p>\n
There are two ways to explain this link between God and giving. Explanation number one: You\u2019re better people. That\u2019s not a very Christian explanation. Explanation number two: You\u2019ve been given a special gift\u2014the gift of giving. Now I\u2019m going to ask you to take a pretty sophisticated understanding here of charitable giving. As Christian people we are taught that giving is important to help others. I\u2019m telling you that the data say giving helps you, so if you want to help others, don\u2019t just give to them\u2014think about what you can do today to help somebody else to give. The main beneficiary of a charitable gift is the giver him- or herself.<\/p>\n
Let me summarize that. What do the data tell me as a Christian man? They tell me that I am the big beneficiary of my own giving, that people similar to me who take their faith seriously are the beneficiaries because we tend to give a lot. We\u2019ve been taught to do what is right, and we are reaping the reward. So how can we, given this fact, reinterpret the scriptures about charitable giving? How can we take it to the next level?<\/p>\n