I’m stymied. That’s a word I rarely use. An amazing community response to a local Christmas Day tragedy led me to thinking about how much it would cost to ease many woes. Is there sufficient wealth to substantially fund the needs, though maybe not the wants, of every volunteer charitable organization? How much do they need? Is it impossible to find the resources? How hard is it to at least financially help a family through a loss, medical bills, a replacement car, and lost income? I almost found an answer but am stymied because I lacked one number.
I thought an estimate would be easy. Total donations to charities from people are about $0.2T. I consider the federal government to be a massive charity that we have all agreed to contribute to. It has many of the same characteristics of a charity: mostly well-meaning not always as efficient as it could be, and not always spending every dollar the way I want it spent. The US government received about $1.1T from personal income taxes. The total of $1.3T doesn’t include person-to-person help, but it is a good start at a total of what must be done. In general then, US citizens are able to fund charitable activities with about 10.5% of their income of roughly $12.4T.
Total Personal Income $12.4T (2010)
Total Personal Donations $0.2T (2010)
Total Personal Income Tax $1.1T (2009)
Estimated Total Personal Donations + Income Tax ~ $1.3T
as a percentage of total ~ 10.5%
Now imagine every charity receiving twice their normal donations. The trick is to find an extra $1.3T. I decided to look at the corporate side of things.
I was stymied because I couldn’t find a consistent set of numbers. I could find how much companies claimed as profit, but corporations have lost credibility in the way they report profits versus revenues versus income. The closest I could come was a number for the Fortune 500 companies as a group. They reported $3.2T in income; but there are thousands more public companies out there, and probably thousands more that are private. That subset led to a cobbled estimate of an extra $0.24T for charities plus taxes.
Total Corporate Revenue ?
Total Fortune 500 Income $3.2T (2010)
Total Corporate Donations $0.015T (2010)
Total Corporate Income Tax $0.22T (2009)
Estimated Total Corporate Donations + Income Tax ~ $0.24T
as a percentage of total ~ 7.5%
Then again, Gross Domestic Product is $14.6T, which is on the order of the numbers I found for personal + corporate income ($12.4T + $3.2T = $15.6T).
The former administrator to one of my favorite charities, NASA, listed eight things that put their budget in perspective.
Bernie Madoff’s Ponzi Scheme $50B
Tobacco products $88.8B
Treating tobacco and alcohol related problems $313B
Illegal drugs $64B
Treating effects of drug use $114.2B
Some things you can’t plan. The total is $1.3T, the same as the number I estimated above for personal contributions to charities.
Getting rid of all alcohol, tobacco, and gambling is too simplistic of an answer, but it does put our expenses and at least the country’s needs in perspective for me. Within the amount we waste is more than enough to ease the suffering of millions.
Another bit of perspective comes from an estimate of the cost of our recent wars.
“The most recent major report on these costs come from Brown University in the form of the Costs of War project, which said the total for wars in Iraq, Afghanistan, and Pakistan is at least $3.2-4 trillion.”
I’m sure that if we really wanted to, we could find the money to make every year a happier new year.
By the way, as Board Secretary of the New Road Map Foundation (aka FinancialIntegrity.org and host of the Simple Living Forums) thanks to everyone who donated this year. You weren’t stymied at all.
PS My semi-annual stock review is due this Saturday. It is the most humbling and painful edition I’ve ever had to produce. (Here’s the previous one for comparison.) Stay tuned.