Black Americans Give More to Relatives
Giving money to relatives.
Oprah has done it – in the form of a $490,000 house for her newly discovered sister. Former NFL cornerback Phillip Buchanon just wrote a book complaining about it. And Charles Barkley is characteristically blunt about it.
“When you continually come to me for money, that’s what ruins relationships,” Barkley explained on NBA TV. “I probably got $4-5 million I lent to friends and family I’ll never see again.”
No one is immune to a relative’s appeals for financial help. But this is a perennial and far more prevalent issue among black Americans – and not just the ultra-rich like Oprah and Barkley – according to Rourke O’Brien at the University of Wisconsin.
What O’Brien calls “informal assistance” exists, in part, because giving bestows non-monetary benefits on the givers as they foster emotional support and solidarity among their kin. But as a personal financial issue, the expectations and feelings of obligation are very challenging – and a topic of conversation in the black community.
One woman commenting online said she was looking for some useful advice about how “to be more comfortable with saying ‘no’ ” to her loved ones.
A major reason this is an issue is the persistent disparities between black and white Americans’ earnings. For example, middle-class blacks are four times more likely than middle-class whites to have siblings who are poor. O’Brien’s statistical analysis of both Federal Reserve Board and University of Michigan data also found that giving informal financial help becomes increasingly common as black Americans move up the economic ladder.
“Regression models indicate that blacks and whites making $20,000 per year provide financial assistance at comparable rates (about 5 percent provide it); however, among households making $80,000 per year, blacks are twice as likely as whites to report providing financial assistance,” O’Brien explained in an email. His analysis controlled for age, education, and marital status.
Other studies that rely on interviewing families have pointed out another interesting cultural difference. While money in white families tends to flow from parents to children, the flow is very different in black families: from children to parents and relatives.
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