Some Donors of Modest Means Give Until It Hurts—Love It

Tom and Bree Hsieh had a vague idea of what they wanted in a honeymoon destination: perhaps a tropical climate, beautiful beaches, a place that seemed exotic.

But that plan soon ran up against reality. The problem wasn’t a lack of money, exactly. Mr. Hsieh had a good job at the technology company EarthLink making more than $125,000 a year.

The problem, if you can call it that, was that the Hsiehs (pronounced “shays”) had no intention of spending all that money on themselves. Devout Christians, they had decided to make a commitment to living at the median household income level—at the time, 2001, about $38,000—and giving the rest away, mostly to antipoverty organizations in this Southern California town and in poor slums overseas.

“It was a discussion we had when we were engaged,” says Mr. Hsieh, 39. His wife adds: “It’s a spiritual discipline for us that allows us to identify not just with the poor but with how people normally live.”

The scale of the Hsiehs’s generosity, while very unusual, is not unique. A few Americans of relatively modest means have chosen to give so much money away that it affects, or even shapes, their way of life. While the philanthropist Warren Buffett this summer implored his fellow billionaires to give more by arguing that doing so wouldn’t affect how they live one bit, these donors say living on less adds to their quality of life.

'A Sense of Equity’

While these donors’ gifts may be small by Buffett standards, they add up.

The Hsiehs, whose income has been as high as $250,000, have donated an estimated $650,000 in nine years. Jill A. Warren, a nonprofit consultant, and her husband, the Rev. Robert D. Schoenhals, a clergyman, have given $520,000 over 17 years of marriage. Richard Semmler, a mathematics professor who holds down two additional part-time jobs so he can give away more of his $100,000 income, says he has donated $1.2-million over his lifetime.

Yet parting with 50 or even 20 percent of one’s modest income isn’t what most Americans think of as a rational way to live. So they don’t: Individual giving as a percentage of U.S. household income has hovered around 2 percent since the 1950s, according to Giving USA, the annual tally of private philanthropy.

And it’s not the poor who are depressing that figure. People who make less than $50,000 donate more as a percentage of their income (an average of 4.2 percent in 2004) than do those making more than $100,000 (who contribute 2.2 percent), according to studies by the Center on Philanthropy at Indiana University.

Giving at the level of people like the Salwens, an Atlanta family who chronicled their decision to sell their dream house and donate half the proceeds in the well-reviewed book, The Power of Half, is inconceivable to most people.

All this raises a question: What separates those who feel that writing a few year-end checks is enough from those who shun the idea of buying a house or taking a vacation so they can do more for others?

Jason Franklin, executive director of Bolder Giving, a New York group that promotes greater philanthropy, says three threads run through the stories of people his organization encounters.

“It’s almost always a sense of faith, a sense of equity, or a passion around an issue,” he says. The Hsiehs, for example, say they are trying to live out the teachings of the Bible, in which Jesus called on people to love the poor. Hannah Salwen, the Atlanta teenager who co-wrote last year’s book, asked her parents to sell their house after she saw a homeless man begging for money alongside a Mercedes coupe and was moved by the scene.

Needing Less Security

These exceptional givers have other similarities. Many of them make philanthropy a key part of their financial planning, says Mr. Franklin. The Hsiehs have three categories in their budget: mandatory, discretionary, and giving.

Such donors also tend to be less concerned about financial insecurity than the typical American. The Hsiehs and other donors argue that even the poor in the United States live much better than poor people in other countries. What’s more, their relatives are very comfortable helping each other out financially when times get tough; many Americans don’t feel that way about their families.

Exceptional donors also tend to be less materialistic. Ms. Warren and the Rev. Schoenhals started giving away up to 60 percent of their income after they were married and realized how much stuff they’d acquired over the years. “We were overwhelmed by the fact that we had spent money on these things in our lives and they weren’t doing any good for anybody,” she says.

Ms. Warren’s and other donors’ decisions to live modestly may also help to reinforce their generosity. Paul K. Piff, a doctoral candidate in social psychology at the University of California at Berkeley, says people who have less are more likely to give and help others.

In a series of experiments detailed in a recent article in the Journal of Personality and Social Psychology,Mr. Piff and his co-authors found that poor people were more likely to share money with others, or provide helpful information to a stranger, than wealthier people. But if wealthier people were primed to think about poverty by being exposed to a short video showing scenes of poor children, they exhibited greater generosity.

Mr. Piff says that the Hsiehs’ experiences living in a gritty neighborhood “is going to increase their levels of compassion and heighten their feelings of generosity.”

Hoping to Inspire

Being exposed to stories of extraordinary donors can also prompt other people to re-evaluate their relationship with money. That’s part of what Bolder Giving hopes to do by publicizing these donors’ stories.

But nonprofits shouldn’t expect to uncover many extreme givers-in-waiting. Habitat for Humanity of Northern Virginia highlights the story of Mr. Semmler, the mathematics professor who builds houses for the charity, in its mailings. And yet Mr. Semmler remains an outlier among Habitat donors.

“In 40 years, I have never encountered someone of Richard’s generosity,” says Frank Lucician, the charity’s president.

Even in Christian circles, the Hsiehs’ story is sometimes met with shock. Derek Eng­dahl, general director of Servant Partners, a Christian missionary group that the Hsiehs support, tells a story about meeting in a very nice house that belonged to members of a nearby church. The discussion was about ways the two churches could work together.

Mr. Hsieh volunteered that he could share his story about giving most of his money away. The room fell silent. Mr. Eng­dahl gently moved the conversation along.

Since the incident, “I try to be a little more tactful,” says Mr. Hsieh, laughing.

But while it may not be many people’s idea of a good life, these donors’ giving provides them deep satisfaction of the sort that’s not possible through checkbook philanthropy. Mr. Semmler develops relationships with people who live in the houses he builds and who go to college because of the scholarships he supports.

The Hsiehs live alongside people they support and interact with them almost every day. Rebecca Gifford, director of Millennium Tools, an antipoverty group in La Canada, Calif., says of Mr. Hsieh: “I don’t think he’d be happy unless he was doing this.”

Like other super-generous donors, the Hsiehs say they don’t feel like they are going without. The couple say they feel blessed and often find themselves being rewarded in unexpected ways. Take the honeymoon. After the Hsiehs ditched their initial plans for an extravagant honeymoon, they simply took a trip to nearby San Diego.

Then, a year later, the couple got a call from Target, the retail chain. Before their wedding, the Hsiehs had created a gift registry with the store and, as a result, they’d been automatically entered into a honeymoon sweepstakes. And they won.

So they got to take a fancy second honeymoon—a seven-day trip to Tuscany, Italy, with lodging in a $400-a-night hotel and $300 a day in spending money—and still have their philanthropy, too.

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This article about InterVarsity alumnus Tom Hsieh and his wife appeared in the September 23, 2010, edition of the Chronicle of Philanthropy. Reprinted with permission of The Chronicle of Philanthropy, http://philanthropy.com. This is the second of two articles. To read the other article, click here.