Giving by the Middle Class

From today's SCMP...

Middle class most generous when it comes to charity
Monday, February 21, 2005, PATSY MOY

Middle-class people with an annual salary of between $400,000 and $600,000 are the most generous donors to charity, Inland Revenue Department figures show.

Taxpayers from that income group contributed $496 million, or 0.69 per cent of their income, to charities in 2002-03 - more than double the rate of those who earned more than 10 times as much.

The nearly 150,000 taxpayers in the middle income group earned a total of more than $70 billion in that year.

Statistically, each contributed an average of $3,000 a year to charities.

People who earned between $7.5 million and $10 million that year contributed 0.32 per cent of their personal income to charities.

Ho Wai-chi, a fundraising consultant to the Hong Kong Council of Social Service, said the rich were "less generous" than the middle class.

In light of the generosity of middle-class families, Mr Ho said he hoped the middle classes could be encouraged to designate part of their assets to charity in their wills, - a concept similar to that of organ donation, allowing them to continue to share their concern for charities after their death.

Mr Ho said some businessmen had made contributions through companies instead of in an individual capacity.

But charitable donations under profits tax exemption in 2002/03 totalled $640 million, only about one quarter of the $2.35 billion from salaries taxes.

Sociology professor Ting Kwok-fai, of the Chinese University, said donors would usually consider the actual amount of their donations instead of the proportion of their income, which may explain why those in the upper economic classes contributed a smaller portion of their salaries.

But Professor Ting pointed out that many people from the middle class in Hong Kong originally came from the less privileged families, climbing the ladder of success through their own efforts such as obtaining a higher education and professional qualifications.

"They were not born with a silver spoon in their mouth and tend to be more sympathetic towards those who live in poverty," the sociologist explained.

Mr Ho expected donations from individual donors could jump fourfold to $10 billion a year from $2.3 billion because the government drastically relaxed the cap on tax deductions for charity contributions from 10 per cent of personal income in the past to 25 per cent last financial year.

He said charities should try to gear up to attract more donations amid the strong competition. They should not just maintain conventional methods to appeal for funding such as charity sales and walkathons.

The number of charities applying for tax deductible status has jumped almost one-third in five years, from 3,060 in 1999 to 3,981 last year.