Editor's Note: Reports Provide A Glimpse of Richest and Poorest Illinoisans
Much has been written — and chanted and shouted — about the growing disparity between those whose incomes rise to the top 1 percent and the rest of us. Also often-chronicled during this economic downturn is the increasing number whose incomes fall below the federal poverty level. Two recent studies provide some striking insights into those opposite ends of the economic ladder.
The first report, from researchers at Northwestern University, is titled Wealthy Americans, Philanthropy and the Common Good. For their pilot study, they interviewed 104 people from Chicagoland in 2011 with a median wealth of $7.5 million. The second is the 2011 Report on Illinois Poverty by the Chicago-based Heartland Alliance.
The report on wealthy Illinoisans says most of them are much more involved in politics than the average resident, with 68 percent having contributed money to a political candidate, party or cause within the four years before the surveys were finished in June 2011. On average, they gave $4,633 to candidates and political organizations during the prior year. Ninety-nine percent voted in the last presidential election.
Fifty-three percent contacted one or more high-level political officials in the prior six months, and 41 percent made multiple contacts. The researchers examined the responses to try to find the reasons for those contacts and determined that “there were many contacts of both types, but somewhat more of them concerned collective matters related to the common good (56 percent) … than concerned narrow economic self-interests (44 percent).”
Eighty-seven percent of the wealthy respondents saw government budget deficits as a “very important” problem facing the United States. Unemployment (84 percent) and education (79) were next in line, followed by terrorism (74) and energy supplies (70). Slightly more than half rated health care (57) and child poverty (56) as “very important.”
In the Chicagoland sample, the median wealthy contributor gave about 4 percent of his or her income to charity. That corresponds with a similar national study by Bank of America and Merrill Lynch, in cooperation with the Center on Philanthropy at Indiana University. That report found that in 2009, high net worth households gave a median of 3.4 percent of their income to charity. That figure dropped from 3.7 percent in 2007, before the economic downturn, the center reported.
Neither the 2010 Northwestern study nor the Center on Philanthropy’s 2009 study provided comparable national figures. But overall in 2008, the median contribution for all Americans who contributed to charity was 1.3 percent of their income, according to another report prepared by the Center on Philanthropy that used a different methodology. That report found that households with an income below $50,000 gave a slightly higher median percentage of income to charity than households with an income greater than $100,000.
The Heartland Alliance’s report on Illinois poverty found that 13.6 percent of Chicagoland residents had incomes below the federal poverty level, which was $11,139 for an individual or $22,314 for a family of four. In Chicago alone, that number was 22.5 percent. In all of Illinois, it was 13.8 percent. Nearly one-fourth of them, 24.6 percent, were children 17 and younger.
The Illinois unemployment rate hovers at about 10 percent, compared with the January 2008 rate of 5.5 percent. And the percentage of Illinoisans younger than 65 without health insurance is 15.5, up from 14.2 percent in 2008.
“Poverty, unemployment and rates of uninsurance are at the same levels or worse than they were during the recession, and incomes have dropped even further,” that report says. “Moreover, many of the government responses that are proven to prevent property and hardship have been weak and far dwarfed by demand.”
The average debt of Illinoisans has increased by 37 percent since June 2003, to $13,416, the poverty report says. The average amount of student loan debt among seniors graduating from four-year Illinois colleges is $23,885. Among Illinois senior citizens, 51.9 percent have no income set aside for retirement other than Social Security.
The poverty report paints a gloomy picture that’s only getting darker. Two of the areas cited as “very important” by the wealthiest Illinoisans, health care and child poverty, are growing worse.
Granted, the two reports toss out a mind-numbing array of numbers, as reports are apt to do. And the survey of 104 wealthy Chicagoland residents may or may not be statistically valid. Comparing the two studies may be apples and oranges, or perhaps more apt, passion fruit and table grapes. But, assuming that the overall thrust of each report is generally accurate, there might be some general conclusions.
In the Northwestern researchers’ own words, culled from various places in their report but with an effort to keep them in context:
“We have rediscovered something important that has long been true: Many wealthy Americans make extraordinarily generous contributions of their time, effort and money to a wide range of charitable causes. At the same time, we find that this generosity has certain limits. These limits deserve serious discussion if we want to further improve the practice of philanthropy in the United States. …”
“Their views about what the most important problems are and how to address them sometimes differ markedly from the views of the general population. This is particularly evident in our respondents’ overriding concerns about budget deficits and their willingness to cut popular entitlement programs in order to reduce deficits. It is also apparent in their general skepticism about many or most government programs. …”
“A similar tendency to favor private solutions applies to education. More than half of the wealthy respondents favor parents getting tax-funded vouchers to help pay for their children to attend private or religious schools instead of public schools. … All in all, wealthy Americans apparently do not favor large new investments of public money to improve the quality of education or access to education in the United States.”
Yet, “although many of our respondents express skepticism about government programs, and although some explicitly say that private philanthropy offers a superior approach, there is no strong tendency for those who are most suspicious of government to do more in the way of charitable activity,” the Northwestern researchers found.
Seventy-eight percent of the wealthy respondents told the researchers that they contribute some money to causes to help the impoverished and the needy. But the study found that 22 percent of their total charitable contributions went to education, and 16 percent went to religious organizations. Only 8 percent went to help those who are impoverished.
“If there is room to increase and improve charitable giving in the United States, how might one go about improving it?” the Northwestern study asks. “One approach is to identify the types of people who are most prone to give and the kinds of arguments that most strongly resonate with their beliefs, values and worldviews.”
Illinois Issues, February 2012