If I told you to imagine a member of the top 1 percent in your head, what would they look like?
Perhaps you’d think of a famous movie star decked out in a fancy dress or tuxedo on the red carpet. Maybe you’d picture your favourite athlete who just signed a lucrative contract. Or, for those readers who prefer specifics, maybe you’d think of a famous billionaire like Bill Gates, Jeff Bezos, or Elon Musk.
But, in the midst of our thought experiment, did you ever think of yourself?
That’s right. If you’re reading this right now, I reckon there is a decent chance that you’re in the top 1% — especially if you live in the United States and work a full-time job.
That is to say, if you earn more than $58,000 per year after tax, you’d be in the top 1 percent globally. Even if you cut that by half to just $29,000 per year (about $14 per hour), you’d still find yourself in the top 5 percent.
You might find this shocking. You almost certainly don’t feel as rich as Bezos and his contemporaries. Unfortunately, I’m not here to tell you that you’re actually a billionaire. I am here to tell you, however, that whether or not you feel rich, you are rich — at least comparatively speaking. This statistical reality is due to the stark income gap between rich and poor countries. In fact, over 700 million people — more than twice the population of the US — earn less than $1.90 per day (adjusted for purchasing power).
In making this point, I don’t intend to sneer at you or claim that you are oblivious to your comparative wealth. Rather, I’m trying to illuminate how little others around the world have. And, as I will show, this has interesting implications. It means that you — yes you, the individual reading this right now — can make a tremendous impact on the lives of the less fortunate, even if you aren’t Jeff Bezos.
I think that is an exciting opportunity, and I hope by the end of this article you will feel the same way.
Charity is not just for the ultra-wealthy
It is common to think that our ability to help the needy is inadequate when we compare ourselves to the ultra-rich, especially when we consider issues that seem too big to solve — like global health challenges, stagnant economic development, and insufficient access to education. It is easy to think that real charitable impact is solely reserved for the kinds of people who go to fancy fundraisers, buy avant-garde artwork, and have university buildings named in their honour.
Thankfully, that isn’t the case. Let me show you the how, and then the why.
The impact created by regular people can be tremendous, so long as we donate to the most effective charities, not ones that are merely good. I say tremendous without hyperbole because the very best charities are often much better than average ones and thus give a much higher return on investment with every dollar donated.
We can extend this idea by considering charities that operate outside of our local communities, cities, and countries. Due to the fact that a dollar goes much further in developing countries — for example, Burundi, which had a GDP per capita of $262 USD in 2019 — than in developed ones, our potential for impact can be monumental.
Imagine a happy hour where you could either buy yourself a beer for five dollars or buy someone else a beer for five cents. If that were the case, we’d probably be pretty generous — next round’s on me!
Will goes on to call this idea the “100x Multiplier”, where those of us who live in rich countries can expect to do at least one hundred times as much to benefit others in developing countries as we can do to ourselves with each dollar we spend. That $58,000 salary I mentioned earlier ends up closer to $5 million when we consider our ability to help the poorest, so long as we donate it to the right places.
Let’s say you’ve found everything I’ve mentioned thus far to be convincing. A question might still linger: Why should we do anything about it? Billionaires and governments have a much greater potential for impact than we do, and we already pay taxes that go to foreign aid. That is a logical and mathematical reality that I will not attempt to refute.
But the fact remains that it is important for us to think about what we can do regardless of what others do. We can’t wait for billionaires to solve the world’s most pressing problems, nor should we. Even if they decide to donate, we should not allow them to monopolize charity. We can lead by example and take action to show governments and the ultra-wealthy what our values are.
To add to this, many of us still feel an urge to be altruistic beyond the money we pay in taxes each year. This is especially true for Americans, who donated over $400 billion in 2018. That number — which is roughly equal to Norway’s nominal GDP that same year — is enough to make Bezos blush. For readers who contributed to that $400 billion figure, ask yourself where you’ve historically donated, and if you are aware of the impact your donations have made. If you have no idea what your donations have actually done, or you’ve primarily donated to those around you, there’s a good chance your donations can go much further, and that you can significantly improve the lives of thousands of people in other parts of the world.
If you take one thing away from this article, I hope it is a sense of excitement at how much potential you have to make a tangible and widespread impact. While it is exceedingly unlikely you’ll have a library named after you, you can still change the lives of thousands of people globally over the course of your life. And if you were to ask me, I’d say having a library named after you is overrated in comparison.
- Earning a yearly salary of $58,000 in the US puts someone in the top 1% globally
- Our ability to help the poorest people in the world is tremendous, and that is a very exciting prospect
- The best charities are significantly better than good ones, so we should be more mindful as to where we donate
- Donating to charities in poorer countries can magnify our impact even further
- Charity should not be reserved solely for the mega-rich or for the government
- If you’re someone who already donates regularly, it might be a good idea to take some time to evaluate the effectiveness of the charities you donate to
- Over the course of our lives, we can impact the lives of thousands of others around the world