For more information regarding this topic, please e-mail your requests to Salvatore J. LaMendola, or call Sal at (248) 457-7204.

Overall the World Giving Index demonstrates that the world has become a more charitable place during 2011 - with a 2% increase in the global population "helping a stranger" and a 1% increase in people volunteering. Yet 1% fewer people gave money to a charity in 2011 than in 2010, a result likely attributable to the ongoing economic impact of the financial crisis.

According to the study, Thailand is the highest ranked country for giving money, with 85% of the population donating to charity each month. The second highest-ranked country is the UK with 79% of the population having made a monetary donation. Ireland and the Netherlands are jointly third with 75%.

The study comes at a time when, as a result of the higher estate tax exemption ($5.12 million per person) and lower estate tax rate (35%), the tax benefits of giving through an estate plan have been eliminated for all but less than 1% of Americans who have taxable estates. In other words, for most Americans, the new, lower estate tax changes their charitable planning. They might have given more away while alive if they knew that their estates would be hit with a 55% tax on assets above $1 million (which, without further Congressional action, will be the law beginning on January 1, 2013). Moreover, the tax savings for a charitable bequest are only 35 cents on the dollar, rather than 55 cents, so the new estate tax is a lesser incentive for testamentary bequests.

While some studies show that taxes are not the most important reason for charitable giving, it's hard to argue that estate taxes don't motivate charitable giving. In fact, data from the Internal Revenue Service (released in late 2009) shows that from 2001 to 2007, as the estate tax was reduced, the percentage of wealthy decedents leaving charitable bequests declined too. The report is stoking charities' longstanding fear that bequests would drop off if the estate tax were repealed (or substantially reduced). According to the IRS data, the share of decedents with gross estates of $20 million or more who left a charitable bequest fell gradually from 48% in 2001 to 43% in 2007. For estates of at least $3.5 million but less than $20 million, the percentage leaving a charitable bequest also fell gradually from 25% in 2001 to 20% in 2007. During that period, the estate tax rate declined from 55% to 45%, and the amount exempt from estate tax grew from $675,000 to $2 million. To review the IRS data click here.

For more information regarding this topic, please e-mail your requests to Julius Giarmarco, or call Julius at (248) 457-7200.