International giving analysis finds no significant link between a number of taxation measures and the amount people donate to charity


Alliance magazine


Government spending and overall tax burden appear to bear no significant correlation to how much money people in a country give to charity, according to new international data analysis by the Charities Aid Foundation (CAF) looking at 24 countries.

Gross Domestic Philanthropy: An international analysis of GDP, tax and giving’, looks at available data for 24 countries to examine some of the factors affecting the link between GDP and charitable giving.

The report looks at measures including overall tax burden, top tax rate, average income tax, corporation tax, government expenditure as a percentage of GDP and employer social security charges.

Only employer social security charges appeared to show any correlation with charitable giving in these counties.

It reveals that, of the countries reviewed, the USA gives away the largest portion of its GDP to charity, followed by New Zealand, Canada, and the UK.

The report is published by CAF, a charity which promotes charitable giving and provides financial services and social finance to not-for-profit organisations.

The snapshot of available international comparative data on charitable giving and taxation, examines data from countries accounting for around 75 per cent of global GDP and 53  per cent of the world population.

It updates findings previously published by CAF in 2006 around international comparisons of charitable giving as a percentage of GDP, which looked at data from 12 countries.

The key findings from this analysis are:

  • From the measures looked at, there appears to be no significant correlation between levels of taxation and government spending and the amount given to charity, with the exception of employer social security charges.  This was based on analysis of tax burden, the top tax rate, employer social security charges, government expenditure as a percentage of GDP, the corporation tax rate, average rate of employee social security charges and the average income tax level at an aggregate level.
  • From the 24 countries looked at, the top four countries in terms of charitable giving by individuals as a percentage of GDP are the United States of America (1.44 per cent), New Zealand (0.79 per cent), Canada (0.77 per cent)  and the United Kingdom (0.54 per cent).
  • The UK is the top European country for charitable giving by GDP of the countries looked at, followed by Italy (0.30 per cent), the Netherlands (0.30 per cent), Ireland (0.22 per cent) and Germany (0.17 per cent).
  • Those who volunteer their time are also more likely to give monetarily to charity.

Adam Pickering, international policy manager at CAF, said:

‘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.

‘The lack of standardised reporting on charitable giving makes it difficult to arrive at definitive conclusions. But we hope this analysis leads to further, more informed discussions about the impact economic factors like tax and overall GDP have on charitable giving.’

CAF’s sixth annual World Giving Index, published in November looked at three ‘giving’  measurements for over 140 countries worldwide, donating money to a charity; volunteering time to an organisation and helping a stranger or someone you do not know.

Our new paper reveals there is 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.

A full copy of the report ‘Gross Domestic Philanthropy: An international analysis of GDP, tax and giving’ – can be found here>

Tagged in: CAF Charitable giving

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