This is a good time of year to reflect on charitable giving. Contrary to the stereotype of the hard hearted capitalist, most businesses and businessmen like to “put something back”. The huge donations of the wealthy, the Gates and the Buffetts, are well publicised, but rare is the entrepreneur who has never put his hand in his pocket for someone worse off than himself.

America’s philanthropic tradition is more developed than Europe’s. Research shows that this is due to America’s religious culture, but even irreligious Americans, like Gates and Buffett, are more likely to see charity as a duty.

There is another difference between American and European, or British, thinking. Toby Ord, a British researcher on a fixed income, has pledged himself to give a million pounds to charity over his lifetime by living frugally.

Commendable, certainly, but an American would probably do things differently. Given the task of giving a million to charity, an American would probably identify Ord’s fixed salary as the real problem. Instead of working for someone else for a pittance, an American Ord would set up his own business. If things went reasonably well, the business might yield a few million in the course of a decade, sufficient for the million– and more – to charity, with enough left over for a comfortable lifestyle.

This way of doing things has two advantages, in addition to the probability of a greater yield for charity. First, it adds value to the economy, while living off a fixed salary subsidised by the taxpayer does not. Second, a reasonably comfortable lifestyle – so long as it is not excessively self-indulgent – is more likely to increase your productivity than grim frugality. Even saints are motivated by the prospect of reward.

Of course, all this misses the point. Most of us do not set ourselves the arbitrary objective of donating a specific sum. Charity is about giving according to one’s means, whether it be the widow’s mite or the loudly trumpeted benefactions of a Gates or a Buffett. The poor are always with us and we can do good to them whenever we want.

Charity – from the Greek word for “love” – is not just a matter of giving from our surplus income. It is about how we treat people generally. It is the complete opposite of charity to behave unscrupulously in business and then hope that a large public donation to a good cause out of ill-gotten gains will put everything right. Honesty and decency – and sometimes, when the opportunity is given, a little compassion – in our everyday business and personal lives would do more good than a million to charity.