A Letter From Santa Barbara

My wife and I attended the Santa Barbara’s Music Academy of the West’s Academy Festival Orchestra’s performance of Stravinsky’s Rites of Spring. We were dazzled. I am not a critic, but I thought they were spectacular. To think that a local, but famed, music organization can gather here in Santa Barbara the best and brightest young musicians from America and the world and hone them into a world-class orchestra in a matter of week is, well, world-class.

On the drive home we talked about how lucky we were to live in Santa Barbara. This is a community rich in culture. We have art, music, dance, history, and architecture of high quality and variety that is outsized relative to the South Coast’s relatively modest population.

Here are a few of our culturally significant organizations (apologies to those left off this list):

These are all private, nonprofit organizations. They are funded almost entirely by charitable donations from individuals, foundations, and corporations.

Looking at the big picture in America, charitable donations in 2016, according to the most recent data from Giving USA, totaled $390 billion. This is the most ever given to charities, even adjusted for inflation.

Who gave? Individuals gave 95% of the total (individually – 72%; their foundations – 15%; bequests – 8%). Corporate giving comprised the other 5% (they are limited due to tax and shareholder policies).

What did they give to? Religion – 32%; Education – 15%; human services – 12%; foundation gifts – 10%; health – 8%. Arts and culture were only 5% of the total, but that is no paltry sum: $18.2 billion.

According to the Charities Aid Foundation (a large UK charity), when charitable giving is measured as a percentage of a nation’s GDP, in 2015 individual donors in the U.S. gave the most: U.S. – 1.44%; New Zealand – 0.79%; Canada – 0.77%; and UK – 0.54%. The numbers for the U.S. in 2016 are even better: 2.1% of GDP. In other words, Americans are the most generous people in the world, by far.

l don’t know how much is donated to our local charities, but, based on the large number of nonprofits here in Santa Barbara County (about 2,000, double the average of California counties), it is likely to be among the highest per capita in California. I’m also guessing that, since our local median income is not much greater than the state average (Santa Barbara – $67,000 vs. state – $64,000), most of the money comes from people of wealth. Because of Santa Barbara’s beauty, climate, and environment people from all over the world know about us which is fortunate because the wealthy flock to our exclusive (i.e., expensive) enclaves. One need only peruse the makeup of the boards of directors of our major nonprofits to see who has the money. I won’t name names but you can Google Montecito and find out who they are. Almost all of them are self-made people, and the few who aren’t also give generously.

Rich people are unselfish with their wealth. Most of our ultra-ultra super rich give it away. The Gates Foundation has a pledge from 170 of the richest people in the world to give most of their wealth to charities. I urge you to visit givingpledge.org and check out who they are. You will not have heard of most of them. Santa Barbara does have a few generous billionaires, but our wealthy non-billionaire citizens are among the most generous.

It is not a coincidence that the rise of “bourgeois” arts and culture occurred at the same time as the Enlightenment and the rise of capitalism. Before then culture was the province of princes and, in the West, the Roman Catholic Church. Composers such as Bach, Mozart, and Beethoven were creatures of the aristocracy. The creation of vast wealth that followed the rise of free market capitalism lifted the West out of poverty, allowing the rise of a bourgeois class that had money and spare time in which to enjoy culture that was once forbidden the common man. Hence, the outpouring of art and music and literature, creations that we still admire today.

Charitable donations tend to follow the economy. Over the past 40 years charitable donations have ranged from about 1.7% to about 2.1% of GDP, a fairly steady band of giving. A higher GDP (a measure of our economic output) means more is wealth created and that results in greater charitable donations.

Despite what Progressives say, as 40 years of data suggests, the tax benefits related to charitable donations do not seem to correlate to the level of giving. Rather, giving is more related to the health of the economy. According to a report issued by the Charities Aid Foundation, a review of the 24 countries in their study did not reveal a correlation between taxes and giving.

Which means that Americans are very generous people motivated more by wanting to do good and less than from tax benefits.

So, look around you. We Santa Barbarans have one of the best cultural infrastructures in the world. You may not have given a thought to how all these wonderful organizations occurred. But it took the initiative, drive, and wealth from your fellow Santa Barbarans to create them and keep them going over the years. Thanks to them, we all can enjoy this cultural richness that princes couldn’t even imagine.