62 people have the wealth of half the world’s population, according to a report by Oxfam International. The number has been shrinking since at least 2010, when 388 individuals had the wealth of half the world’s population. What is shocking is despite the recent progress of the world’s poorest countries, the gap between the richest and poorest people has widened. The rich continue to get richer. The poor continue to stall in the shadows of the wealthy.
Just as it is the duty of kings to protect the peasants, it is the duty of the rich to look out for the poor. There is a limit to the amount of joy wealth can bring any single person. Research has identified amounts ranging from $65,000 to $125,000 per year, depending on where you live, as being the threshold for happiness. Any more than that and any additional wealth won’t make you happier.
If you make more than $125,000 a year, what do you do with the extra money that won’t make you any happier? The answer is easy. You use the extra money to make other people happier. Making other people happier will make you even happier. That is how you become even happier after you’ve reached the limits of happiness that wealth can bring.
It is no secret that poverty often begets crime. It is when someone is pushed back against a wall with nowhere else to go that they lash out with aggression. Rich people worry a lot about safety. They spend much of their time and money building walls around their wealth, both figuratively and literally. They are wary of the poor being jealous of their wealth.
This is where philanthropy comes in. If you willingly give away your extra wealth, the desperately poor will have more choices in life. It is only when a desperate person runs out of choices that they choose to hurt others and take what is not theirs. Crime is low where there are more choices. Crime is high where people have no choice but to fight for the right to live. When wealthy people give back to the community, they not only make it safer for themselves, but they also increase their own happiness.
Humans are not innately evil. Instead, they are drawn towards good. It makes people feel good to help others. Without the instinct to help others, the human race would not have survived the last 200,000 years. Helping those in need taps into our reciprocity instinct. When somebody helps you, you have the instinct to reciprocate and help back. It feels awkward and morally wrong not to. It works both ways. When you help somebody else, that person will want to help you back. The community protects the generous wealthy person. The wealthy miser has to constantly worry about safety.
If you do make it past the happiness threshold of wealth and want to become even happier by giving some away, your biggest problem then becomes “who do you give it to?” Obviously, giving the money to your neighbor won’t make as much of an impact as giving it to starving a homeless person. You want to make the most significant impact you can for the money you give. Derek Thompson wrote an excellent article on giving that concluded that fighting malaria might be the greatest good you can do with your money. He references GiveWell.org, which attempts to rank the charities that create the greatest good for the money you donate.