Relationship between Charitable Donations and Income in the city of Karachi
Introduction
One of the measures of the goodness of a nation, particularly its middle class, is its level of civic engagement. According to the World Giving Index 2012, a survey of giving behaviors compiled by Charities Aid Foundation using data gathered by Gallup, Pakistan ranks at number 85 out of a total of 153 countries. The World Giving Index measures charitable behaviors in three key areas: donating money, volunteering time and helping a stranger. Pakistan’s position in the global ranking has dropped significantly as it was ranked at number 34 in 2011. However it is the fourth (out of a total of seven countries) most charitable nation in South Asia after Iran, Sri Lanka and Afghanistan. The report said that 38% of all Pakistanis donated money to charity in 2012, and that 51 percent found some way to help a stranger.
However, in 2013, Pakistan again managed to jump up to 53rd position, thanks to the contribution its citizens made in that year towards the flood victims and earthquake IDPs. Pakistan also ranked number 5 among the countries by the number of people donating money, with a total of more than 45 million making a contribution. Not surprisingly, more than half of it came from Karachi alone!
Literature Review
There are multiple factors that may have contributed towards making Karachi the greatest charitable donor city of Pakistan.
Income
According to a research1, higher income earners contribute more money towards charity, in absolute terms, as compared to their lower income counterparts. This does not come to ne as a surprise, considering the fact that Karachi’s GDP alone for year 2013 was more than 46.2 billion USD, which is almost 20% of that of the whole of Pakistan.
After-tax cost of donating
A number of studies2 confirm that jurisdictions offering more favorable tax treatments for donations are likely to experience higher levels of charitable giving. When the tax treatment of charitable contributions offers greater
One of the measures of the goodness of a nation, particularly its middle class, is its level of civic engagement. According to the World Giving Index 2012, a survey of giving behaviors compiled by Charities Aid Foundation using data gathered by Gallup, Pakistan ranks at number 85 out of a total of 153 countries. The World Giving Index measures charitable behaviors in three key areas: donating money, volunteering time and helping a stranger. Pakistan’s position in the global ranking has dropped significantly as it was ranked at number 34 in 2011. However it is the fourth (out of a total of seven countries) most charitable nation in South Asia after Iran, Sri Lanka and Afghanistan. The report said that 38% of all Pakistanis donated money to charity in 2012, and that 51 percent found some way to help a stranger.
However, in 2013, Pakistan again managed to jump up to 53rd position, thanks to the contribution its citizens made in that year towards the flood victims and earthquake IDPs. Pakistan also ranked number 5 among the countries by the number of people donating money, with a total of more than 45 million making a contribution. Not surprisingly, more than half of it came from Karachi alone!
Literature Review
There are multiple factors that may have contributed towards making Karachi the greatest charitable donor city of Pakistan.
Income
According to a research1, higher income earners contribute more money towards charity, in absolute terms, as compared to their lower income counterparts. This does not come to ne as a surprise, considering the fact that Karachi’s GDP alone for year 2013 was more than 46.2 billion USD, which is almost 20% of that of the whole of Pakistan.
After-tax cost of donating
A number of studies2 confirm that jurisdictions offering more favorable tax treatments for donations are likely to experience higher levels of charitable giving. When the tax treatment of charitable contributions offers greater