When rich people donate money to non-profit organizations, does it adversely affect the wealth of society?

Question

Billionaires donate money to cancer research, education, victims of child abuse, etc. but does that money affect people in general economically? It seems like if billionaires give a lot of money to organizations which do not benefit individuals economically instead of just spending it, then people will be poorer. Obviously the amount of money donated in relation to the amount of money in the U.S. economy is miniscule so we would not notice any change but if people become more generous by giving more to organizations which do not make money, would this hurt the economy?

Answer 1

You make it sound as if money donated to charitable organizations just disappears. Those organizations are quite eager to spend that money accomplishing whatever goals they have. Most charities employ people at wages at or near what the private sector would pay, and they spend plenty of money to produce various goods and services.

Answer 2

The wealth of society is not the same as GNP. As the first answer pointed out, because the donated money is still spent on good and services, it would have little effect on short term GDP. The effect of charity depends on what would have been done with the money if it had not been given away. If the money is spent on research or education, it would add more wealth than money spent on private consumption. It is possible that the money would have otherwise been invested in activities that would have created more wealth than the charitable activities.

Answer 3

i agree with the other answer plus you can use charitble donation as a tax write off