On Monday morning, millions of Americans will gather with loved ones to engage in a vitally important social activity: giving gifts.

They may do so to continue family tradition, or to participate in a cultural holiday, or to celebrate the gift of a Savior. Whatever the reason, the practice of giving taps into something deep in the nature of the person.

Giving our time and money to others tends to have significant implications for our individual well-being and that of our local communities and nation. Charitable giving is associated with higher levels of health and happiness, increased prosperity and strong community organizations.

Just as significant is the way that giving and receiving gifts shape our moral vision. Given the numerous "spillover effects" of private giving for larger society, government has a strong interest in ordering society in such a way that charity can flourish.

Researcher Arthur Brooks examines the benefits of giving in his new book, "Who Really Cares: The Surprising Truth about Compassionate Conservatism." In terms of physical health and happiness, Brooks notes that people who give more charitably are 43 percent more likely to say they are "very happy" than non-givers, while non-givers are three and a half times more likely than givers to report they are "not happy at all."

In addition, several large studies have also found that senior citizens who volunteer have a 40 percent lower probability of dying in a given year than people of the same age and health level.

Giving also increases personal and well as national prosperity. Pointing to a survey conducted in 2000 that controlled for education, age, race and all the other outside explanations for giving and income increases, Brooks reports that a dollar donated to charity was associated with $4.35 in extra income.

Of this additional income, $3.75 was due to the dollar given to charity. At the national level, a 1 percent increase in national giving appeared to increase real GDP by about $36 billion.

Charitable giving is important for strong local communities as well. As Brooks explains, not only do giving and volunteering correlate with honesty and promote bonds of trust among neighbors, but they also sustain numerous charities providing critical services in education, health, the arts, the environment and disaster relief. Because such organizations can provide a buffer against the authority of the state, suggests Brooks, giving to them is also important for protecting freedoms and fostering democratic values.

In addition to charity's effects on health, happiness, income and community life, giving's most powerful influence may lie in its ability to shape moral vision. The practice of voluntary giving fashions the way we see wealth, poverty, and personal obligations toward those in need.

Without charity, Americans would become more dependent on impersonal government for a vast array of services. This, in turn, would foster a social relationship where one side perceives aid as a forced penalty rather than a voluntary offering and the other side views aid as a right rather than a gift.

Impersonal government checks can foster a mentality that undercuts the motivation to feel or give gratitude when received. In contrast, gifts create a kind of momentum of good will, which has the potential to bind both giver and receiver into a more personal relationship. Interestingly, Brooks found that people are much more likely to give away money they earn than money they receive from the government. Voluntary giving and receiving beget more charitable ways of seeing and living in the world.

In sum, these financial and non-financial advantages demonstrate that giving is good not only for the receiver, but also for the giver -- as well as the giving society. Government therefore has an obligation to make policy that is conducive to Americans' charitable spirit. Policy should clear the way for citizens to act upon their generosity with ease. Government should not make it difficult to engage in charitable and civic activities through burdensome legal requirements, punitive mandatory expenditures, bureaucratic red tape and controversial hiring practices.

Government should provide the fair, legal space in which faith-based charitable organizations can meet social needs.

Government can also influence charitable giving through its economic and welfare policies.

According to Brooks, government entitlement programs have a negative impact on charity -- they drive giving down among both rich and poor. On average, a working poor family is more than twice as likely to give -- and gives more than three times as much money -- and almost twice as likely to volunteer as a family receiving roughly the same amount on welfare.

What stands out from Brooks' research, however, is that the mere support for income redistribution policies tends to substitute for giving. In a 1996 General Social Survey, those who disagreed with the question, "The government has a responsibility to reduce income inequality" gave more to every type of cause and charity, including nonreligious charities, human welfare agencies, and traditionally liberal causes such as the environment and the arts. This trend holds whether or not the government actually implements a policy to address inequality.

Public policy should reflect the importance of charity in America. In short, when it comes to economic inequality, liberal political opinions seem to substitute for private action. Because research reveals that giving leads to greater prosperity and a higher quality of life for the poor, the national debate concerning poverty should consider the significance of private charity in addressing this question.

The Christmas season reminds us that wise men give gifts. Giving sets off a cycle of blessing that benefits giver, receiver, and society alike. A wise government knows that is something its policies cannot replicate, but must respect.

Ryan Messmore in the William E. Simon Fellow in the DeVos Center for Religion and Civil Society at The Heritage Foundation.