Steve Lear

The Traditional View of Wealth

When people hear the word wealth, they often picture stacks of cash, luxury cars, or expansive estates. The perception isn’t surprising – wealth has long been associated with the accumulation of assets and personal-use resources. Since the late 18th century, this interpretation has dominated, especially after Adam Smith’s influential work, The Wealth of Nations, which defined a nation’s wealth as the annual production of its land and labor.

In modern terms, wealth is typically measured by net worth – total assets minus liabilities. To be considered wealthy, a person generally needs more income than expenses, and often that income comes from unearned sources. Unearned income includes returns from investments, such as interest, dividends, capital gains, and rental income. It can also include annuities or Social Security benefits. In contrast, earned income is what most people generate through employment.

A Shift in Meaning: From Well-Being to Materialism

The definition of wealth hasn’t always been economic. Historically, the term “wealth” signified well-being, health, and happiness. According to the Oxford English Dictionary, the word originally comes from the Old English wealthe, meaning welfare or prosperity. Over time, however, societal values shifted, and wealth came to be associated with material possessions and monetary success.

Today, many people equate wealth with financial milestones, such as becoming a millionaire or achieving financial independence. But wealth can also be viewed through a broader and more human lens: generosity.

Measuring Wealth Through Generosity

One meaningful and increasingly relevant way to measure wealth is to focus on the resources you’re giving, rather than gaining. The practice of philanthropy – the desire to promote the welfare of others – has ancient roots. In early civilizations, such as those of Mesopotamia and Egypt, charitable acts were often closely tied to spiritual fulfillment and moral duty.

In the 19th century, philanthropy became more structured. Industrialist Andrew Carnegie argued in his famous 1889 essay, The Gospel of Wealth, that those who accumulate riches have a moral responsibility to give back to society. He wrote, “Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community.” Carnegie embodied this belief, donating more than $350 million – worth billions today – to causes such as public libraries and higher education, including the founding of Carnegie Mellon University.

Modern day philanthropists such as Bill and Melinda French Gates have continued this legacy. Since 2000, the Gates Foundation has donated more than $50 billion to initiatives focused on global health, education, clean water, and poverty alleviation.

Minnesota’s Legacy of Giving

On a local level, Minnesota has consistently ranked among the top three charitable states in the country since 2019, according to WalletHub’s annual poll.¹  This poll evaluates states on 17 key charitable indicators, including the volunteer rate and the share of income donated. The state’s high rating is due to the combined generosity of both business and individual donors.

Minnesota’s reputation as a leader in corporate philanthropy spans generations. Fifty years ago, the Dayton family, whose Dayton Hudson Corp created Target, established the Five Percent Club. They invited companies to join them in giving 5% of their pre-tax earnings back to the community. According to a Minnesota Star Tribune report,² this club was renamed the Minnesota Keystone Program in 1983 and expanded to include companies that donate 2% or more of their profits to the community. It remains the only program of this kind in the country. In 2023, approximately 200 Minnesota companies, ranging from large Fortune 500 corporations to small businesses, participated in Keystone, with about 100 of these organizations donating 5% or more of their profits.

Individual donors also give generously. A key example is Minnesota’s annual Give to the Max Day, one of the largest grassroots fundraisers of its kind in the nation. In 2024, GiveMN³ reported a record-breaking $37 million in donations during this event, which was distributed to over 6,500 nonprofits and schools. Despite the economic volatility of the past few years, Minnesotans continue to embrace a legacy of giving driven by values, empathy, and a sense of purpose.

The Data Behind Generosity

Recent data analyzed using artificial intelligence tools shows that generosity scales with income, but not in the way you might expect.

According to Forbes⁴ and data from EconoFact, 88.3% of households with annual incomes between $ 2 million and $5 million donate an average of 3.44% of their income. Those earning $10 million or more donate even more – an average of 8.6%. In total, 85% of affluent U.S. households make charitable contributions.

Importantly, the most generous states in the U.S. are not necessarily the wealthiest. According to WalletHub’s 2024 poll,⁵ Wyoming took the top spot as the most charitable state with residents donating nearly 4% of their adjusted gross income, followed by Utah, where residents gave 3.6%. You don’t need to be a millionaire to be generous!

Why Giving Matters

When you actively look for ways to use your time and money to help others, you develop a generosity mindset, which results in significant benefits for donors as well as recipients.

According to studies cited by lifeusa.org,⁶ individuals who donate to charitable causes tend to build more social connections. These relationships often open doors to leadership opportunities, career growth, and even improved earning potential.

Philanthropy also stimulates local economies by funding nonprofit initiatives, which in turn create jobs and services. Tax incentives further encourage giving by allowing donors to redirect some of their money toward other investments or additional acts of generosity.

But perhaps the most profound impact of giving is personal. Research from The Charity CFO⁷ indicates that 96% of donors report feeling a moral obligation to help others, and approximately 20% say that giving brings them lasting joy and fulfillment.

Giving fosters a shared sense of purpose and creates a collective impact. Donations, whether large or small, help shape stronger communities, support vulnerable populations, and inspire others to contribute as well.

Redefining Wealth for a Better Future

Whatever your income, if you donate just 3.44% of it—roughly the average amount donated by high-income households—you are already giving at a meaningful level! Most importantly, giving helps you to build relationships, create impact, and lead a life driven by purpose rather than possessions.

Let’s start defining wealth from a generosity mindset! By shifting the focus from accumulating assets to helping others, we will foster a culture that measures success by the resources invested in improving lives and repairing the world.

ENDNOTES

1. Adam McCann, “Most Charitable States,” WalletHub, November 11, 2024.https://wallethub.com/edu/most-and-least-charitable-states/8555
2. Kelly Smith, “Minnesota was once a leader in corporate philanthropy. Is that still true?”, StarTribune, July 7, 2023, https://www2.startribune.com/minnesota-five-percent-club-charitable-giving-donations-volunteering-ranks/600287923/#:~:text=Corporate%20giving%20has%20declined%20over,tax%20profits%20to%20the%20community.&text=Individuals%
3. “Donors Give a Record-breaking $37 Million During Minnesota’s Annual Give to the Max Day, PR Newswire, November 22, 2024, https://www.prnewswire.com/news-releases/donors-give-a-record-breaking-37-million-during-minnesotas-annual-give-to-the-max-day-302313997.html
4. Arianna Johnson. “Rich People Donate More When They Actually See Poor People, Study Suggests,” Forbes, June 14, 2023
   https://www.forbes.com/sites/ariannajohnson/2023/06/14/rich-people-donate-more-when-they-actually-see-poor-people-study-suggests/
5. Adam McCann, “Most Charitable States,” WalletHub, November 11, 2024.https://wallethub.com/edu/most-and-least-charitable-states/8555
6. Ajoyce140, “Why Giving Makes You Wealthier,” Life for Relief and Development, October 4, 2024, https://www.lifeusa.org/post/why-giving-makes-you-wealthier#:~:text=Research%20from%20the%20Social%20Capital,a%20275%25%20return%20on%20investment!
7. Paul Cook, “Why Do Donors Give?”, The Charity CFO, August 8, 2022, https://thecharitycfo.com/the-psychology-of-fundraising-why-do-donors-give/