I was having a philosophical argument with myself (completely sane, right?) about the moral righteousness of someone giving to charity while receiving government aid. This came about after reading a letter to a columnist in the New York Times Magazine.
The letter goes on to state:
I helped prepare a tax return for a man with a low income, about half from unemployment compensation. He had donated 10 percent of the total to his church. If he didn’t need this taxpayer-provided money, he should have refused it or saved it in case his benefits expire. Isn’t there an obligation not to be a burden to others before giving away money?
As I was reading it, I immediately got upset that he called unemployment compensation “taxpayer-provided money.” After all, it is usually called unemployment insurance and everyone who works pays into it. The fact that he is collecting on it doesn’t mean he is a mooch. That is how insurance works – pooled risk. When you total your car and I don’t get in an accident, you aren’t mooching. You are collecting on a benefit that you are due. I was glad that the columnist response touched on that briefly.
The columnist also questions the use of the writer’s choice of word “need.” He uses the example “Would you condemn this man for buying new clothes? Surely he does not need them; he could wear used clothes.” I thought this was a pretty interesting point and touches on the sensitive subject of want vs need. This is one of the lessons my parents taught me as a kid, but the definition is still pretty fuzzy at times. Do I want that Chicken Parmesan, or do I need it? I mean, I know I need food. But does that mean that “need” is limited to bare essentials like rice and beans or pasta and everything beyond that is want? It’s a grey area, for sure.
I tried to think about myself in that situation. If anything, I give the guy credit. He donated 10% of his income despite the tough place he was in. How many of us can say we do the same? It’s admirable in my book.
The response also included a quote from George Orwell from “The Road to Wigan Pier”
“When you are unemployed, which is to say when you are underfed, harassed, bored and miserable, you don’t want to eat dull wholesome food. You want something a little bit ‘tasty.’ There is always some cheaply pleasant thing to tempt you. Let’s have three pennorth of chips! Run out and buy us a twopenny ice cream! Put the kettle on and we’ll all have a nice cup of tea!… Unemployment is an endless misery that has got to be constantly palliated, and especially with tea, the Englishman’s opium.”
In Orwell’s explanation of an unemployed person, the Englishman clearly can not afford his tea and ice cream, but it is something that brings about joy for him.
Similarly, that raises a question then: If someone is receiving government aid, should we expect them to forego their ethics because of a “lack of economy?”
Should they ditch their altruism? Would you?
I'm MLR. After graduating from college debt free, I decided to write a blog encouraging people to adapt responsible and sensible personal finance rules.
November 10th, 2009 at 11:49 am |
First, very sane that you have arguments with yourself.
Second, I loved this post. A lot of food for thought.
I agree with MLR (I don’t always – I promise) that it is in fact commendable that this man gives to charity despite his situation. I imagine most people would say “I’m on unemployment – how can u expect me to spare anything?” If you’ve read my post from a million years ago, you’ll know I’m interested in people’s take on charity, and my own religion’s take on charity. In Judaism, even the poor are supposed to give. Clearly, they may not be able to give as much as the wealthy, but they should still give. I think the habit and mindset of giving are invaluable. I’m curious to know what everyone else thinks. It’s an interesting scenario.
HerLifeROI´s last blog ..Should Someone Receiving Government Aid Give to Charity?
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MyLifeROI Reply:
November 13th, 2009 at 5:06 pm |
@HerLifeROI,
Good thoughts. If anyone is interested in the post HLR mentions, you can read it here:
http://www.myliferoi.com/2009/04/the-savings-account-the-spending-account-the-charity-account/
It’s titled “The Savings Account, The Spending Account, & The Charity Account”
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November 10th, 2009 at 12:38 pm |
I give MAD PROPS to the guy who is so generous to donate 10% of his unemployment income (which he rightly deserves) to charity. He’s not wealthy by circumstance, and therefore is an absolute saint in my eyes.
Financial Samurai´s last blog ..What Would You Do With $8.5 Million If You Won The WSOP?
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MyLifeROI Reply:
November 13th, 2009 at 5:07 pm |
@Financial Samurai,
That’s pretty much what my thoughts are. It is a wonderful thing to see someone who is in need give to someone who is in even more need.
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November 10th, 2009 at 8:50 pm |
In looking to judge the situation, if the man is able to control his expenses to create the ability to give 10% of his income, unemployment benefits though it is, then it’s perfectly fine that he chose to allocate his resources in that way. Here’s why: This benefit is not charity in and of itself, it’s a benefit that his wages contributed to and he’s not abusing the system to create that income flow. If he were dishonestly collecting unemployment and giving the money away, that would be another ethical issue.
Aside from that, the letter writer has a point about taking care of yourself so that you’re not a burden to others but is also making an assumption that the man is, in fact, a burden to someone. Unless the man is giving away his money in excess of what his personal budget can afford, and then taking money away from another resource, he’s not rightly a burden.
Thus and so, I think it’s fine that he chose to continue to give regardless of his state of employment.
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MyLifeROI Reply:
November 13th, 2009 at 5:08 pm |
@Revanche,
I want to highlight one portion of what you said: “and then taking money away from another resource…”
I didn’t even think about that. If giving away 10% of his unemployment income then forces him to collect food stamps, does that change the question? For arguments sake he could have used that 10% for food instead.
I think that would tilt me to the opposite corner if that was the case.
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Revanche Reply:
November 14th, 2009 at 8:16 pm |
@MyLifeROI, That’s where I was going with that. And any other kind of resource could apply: family/friend loans, bank loans, other forms of government aid, charity. Creating a deficit in your own budget which then taxes the system as a whole some more then makes the choice to give away the money he’s receiving less acceptable in my eyes.
Revanche´s last blog ..Slacker McSlackerby
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November 11th, 2009 at 12:34 am |
Not to be overly picky, but EMPLOYERS pay into unemployment insurance, not EMPLOYEES. So the man getting the benefit didn’t actually pay into the system. Slightly different than the way that insurance typically works. Hair splitting, perhaps.
Having said that, I can’t really find fault with this. As you say, unemployment is (in theory) not taxpayer funded.
If the person was on food stamps and was giving away the food, would my answer be different? I’m not really sure. Maybe.
Kosmo @ The Casual Observer´s last blog ..The Best League Ever
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Financial Samurai Reply:
November 11th, 2009 at 11:52 am |
@Kosmo @ The Casual Observer, we’ve discussed this before. Employers pay the unemployment benefits, but that is BAKED IN to the cost of hiring an employee.
So, if the employee paid, their salary would probably be commensurtely higher by the amount they paid.
Also, anybody want to help spread the word there are 131,000 homeless veterans in America? It’s ludicrous, and I think we need to raise awareness!
Financial Samurai´s last blog ..Why Are There Homeless Veterans In America?
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Kosmo @ The Casual Observer Reply:
November 11th, 2009 at 1:31 pm |
@Financial Samurai, OK, fair enough. I missed that discussion.
Kosmo @ The Casual Observer´s last blog ..Glacier National Park
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MyLifeROI Reply:
November 13th, 2009 at 5:10 pm |
@Kosmo @ The Casual Observer,
Oh, touche. I’ll admit I did not even realize that.
But that is because each state I have worked in (including my current one) DOES indeed charge the employee an unemployment insurance fee/tax on their paycheck. It is pretty minuscule (I think less than $5-10 a month).
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Kosmo @ The Casual Observer Reply:
November 13th, 2009 at 5:15 pm |
@MyLifeROI, Really? FUTA is a federal program ( http://en.wikipedia.org/wiki/Federal_Unemployment_Tax_Act ) so I’m curious what’s going on in those states. Maybe they provide additional benefits?
Kosmo @ The Casual Observer´s last blog ..The Attack
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MyLifeROI Reply:
November 13th, 2009 at 5:20 pm |
@Kosmo @ The Casual Observer,
Check http://en.wikipedia.org/wiki/Unemployment_benefits#United_States
Excerpt: “Therefore, the net FUTA tax rate is generally 0.8 percent (6.2 percent – 5.4 percent), for a maximum FUTA tax of $56.00 per employee, per year (.008 X $7,000 = $56.00). State law determines individual state unemployment insurance tax rates.”
So, for example, when I worked in Pennsylvania it would show up on my check as PA SUI — Pennsylvania State Unemployment Insurance.
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kosmo @ The Casual Observer Reply:
November 13th, 2009 at 9:22 pm |
@MyLifeROI, OK, but where does it say that employers pass a portion of this on to employees? The excerpt you’re showing seems to indicate that employers are getting a rebate on what they are paying.
Maybe I’m overlooking something in the article, though – it was long as I didn’t read it all :) I’m not trying to be argumentative – I’m genuinely interested.
I know that I personally don’t pay a cent – I log every aspect of my paycheck in Quicken, and there’s definitely no money coming out for this. I’m fairly certain that it wasn’t taken out when I worked in Illinois either (same employer). I’m currently in Iowa.
kosmo @ The Casual Observer´s last blog ..Country Music, Computer Scams, and Baseball
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MyLifeROI Reply:
November 13th, 2009 at 9:35 pm |
@Kosmo @ The Casual Observer,
Check this out for Pennsylvania, as an example:
http://www.payroll-taxes.com/PayrollTaxes/00000314.htm
Pennsylvania Unemployment Insurance
Employee rate – 0.06% for 2009 (.08% for 2010) is withheld from gross wages. This tax is to be remitted to the Department with the employer’s quarterly unemployment tax.
I can’t find a site that lists which states charge unemployment insurance directly to the employees. I know for a fact that I paid it, though. Same in New Jersey.
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Kosmo @ The Casual Observer Reply:
November 14th, 2009 at 12:33 am |
@MyLifeROI, Fascinating. I did confirm with my wife (a CPA who has done work for clients in surrounding states) that none of the bordering states collect unemployment premiums from employees. Maybe it’s a regional thing, based on historical unemployment rates? Iowa generally has one of the better unemployment rates in the nation. It was 6.7% in September, tied for the best in the nation. Pennsylvania was 26th at 8.8%, NJ was 36th at 9.8%.
http://www.bls.gov/web/laumstrk.htm
Or maybe salaries are higher in those states, leading to larger payouts? The midwest tends to have a fairly low cost of living.
Thanks for teaching me something new :)
Kosmo @ The Casual Observer´s last blog ..Review of The Lost Symbol
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November 11th, 2009 at 5:51 am |
I think what the person did is ethical and OK. If they have enough to provide for their family and give to the needs of others, more power to them. There’s no required income that qualifies a person as a giver.
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November 11th, 2009 at 10:19 am |
What a very interesting post. I don’t think it’s anyone’s place to dictate what you do with your own income. I would think the gov would like the fact that people are giving part of their income to help charity.
We need to get away from the idea that when you receive any funds from the gov that they own your every move.
Emergency Cash´s last blog ..No Teletrack Payday Loans
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November 11th, 2009 at 9:57 pm |
Wow, what a topic. Without avoiding the topic, I think it would also depend on the exact reasons of why this person is collecting unemployment. Quit? Fired? Laid off?
Also, how actively is he seeking work.
In my opinion, if this person lost his job through no fault of his own and is actively and honestly seeking employment, then it is no one’s business what he does with his money. Rather, no one can judge him for donating it. To the contrary, he should be commended.
But again, I think it all depends on the circumstances behind his unemployment.
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November 12th, 2009 at 3:53 am |
if he was on government aid i dont think that he should have given to the church because the concept of tithing is when you get income out of work done. I seem to think that government aid is not income from work. But i have been wrong before. But its all relative. Some people give 10% to the church or charity of all the cash that comes into their hands
kenyantykoon´s last blog ..WHAT IS (OR WERE) BEARER BONDS??
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MyLifeROI Reply:
November 13th, 2009 at 5:13 pm |
@kenyantykoon,
I’ll have to look into the concept of tithing more.
But, for arguments sake, let’s say he didn’t give 10% to his church as a tithe. Instead, he gave 10% to the salvation army for charities sake… he just wants to help people.
Does that change your thoughts?
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November 13th, 2009 at 9:26 pm |
OK, here’s a thought – does the timing of the contributions line up with the time they were on unemployment?
Thing of this scenario:
I earn 10K between January and April and donate 2K to charity. Then I lose my job and make 10K in unemployment from May – December. I donate nothing to charity during this time. Overall, for the year, I donate 10% of my income.
The person who wrote the original piece probably accounted for this, though.
kosmo @ The Casual Observer´s last blog ..Glacier National Park
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November 19th, 2009 at 6:00 pm |
That’s an interesting one. I know when I was receiving unemployment, I still gave to my church; between the sense of religious obligation and hoping to curry whatever favor I can with the powers that be, it just seemed like the right thing to do. Beyond that, I am of the opinion that money you get from unemployment (or other government benefits, for that matter) is your money, and should be put to whichever purpose you deem worthwhile (provided it is legal).
Roger´s last blog ..So You Want to Invest: Index Mania
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March 3rd, 2010 at 9:33 am |
This is a tough one. Even though my knee-jerk reaction is to say that he needs the money more than any charity (where even the best charity waters down a portion of donations into administrative fees, etc), I actually really admire what he did. There are way too many people who don’t give when they can; if we can shift the paradigm, even one person at a time, to where charitable giving is expected from all people, I think we’d be better off for it.
It gets a bit greyer for me, personally, because he gave it to his church (and 10% is an “obligation” in some religions, isn’t it?) but I hope the church, in turn, puts it to good use in the community.
100 Fundraising Ideas´s last blog ..Fundraising for Animal Charities
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March 9th, 2010 at 2:07 pm |
does it matter to anyone, if the person owes thousands of dollars to creditors and purposely refuses to pay them ANYTHING, under the excuse that the “charity” need the money more?
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