Charitable Giving in the United States

Who tops our “Shame Score”?

A report was released today by The Chronicle of Philanthropy, titled “How America Gives.” The report maps charitable giving by state, city and neighborhood, by analyzing IRS personal income tax data at the zip code level. Using the amount of charitable deductions, The Chronicle’s report showed which places gave the greatest (and least) portion of their income to charity. (Actually, the report would be more accurately named “Where America Gives,” not “How.”)

I did a similar analysis about a year ago, using the same data, and I’m pleased to see we reached the same conclusions. To summarize it simply, the poor give a greater percent of their income to charity than the wealthy, and people are more likely give more in states that vote Republican and are strongly religious.

The states with the highest percentage of claimed charitable contributions are Utah, Mississippi, Alabama, Tennessee, and South Carolina. The least generous states are New Hampshire, Maine, Vermont, Massachusetts, and Rhode Island.

I must admit, this is not what I had expected to find.

I had thought that Blue (Democratic) states would give more, since they are often willing to pay more for the public good in the form of higher taxes. And I’m surprised that some of the poorest cities and states gave the greatest percent of their income to charities.

But let’s look more closely at the underlying assumptions. Firstly, this is only the “charitable contributions” line item in the Form 1040 Schedule A, and we have no way of knowing the recipients of the contributions. Indeed, there is a high correlation between states with high religious affiliation and higher charitable giving. The states with the most giving where also those with a high percentage of their population identified as Baptist and LDS (Mormon).

Not all religious populations are the same in the amount of charitable giving. For the record, Baptists appeared to give significantly more than LDS populations. Catholics actually showed a very strong negative correlation, meaning the greater the density of Catholics, the more likely a lower level of charitable giving. Judaism was the other religion with a pronounced negative correlation to giving.

The fact that Red (Republican) states give more may be attributed to the fact that there is a positive relationship between places which are more religious and have conservative voting patterns.

We created a “Shame Score”, which may be a bit hyperbolic but which highlights those metros which have the highest median income but which itemize the least percentage of their income as a charitable deduction. In other words, these places have the most, but share the least.

At the top of the list are Rockingham/Strafford Counties NH, Manchester NH, Long Island NY, San Jose, and Edison NJ. We also find wealthy suburbs of Boston, Washington DC, Chicago, San Francisco, and Los Angeles. At the other end of the list, we find places such as Logan and Provo UT, Anniston AL, Hattiesburg MS, and Sumter SC. Click here to download a spreadsheet of our full ranking of the 379 U.S. metro areas, using our Shame Score.

This analysis almost generates more questions than it answers. Are the churches taking the place of government programs which have been absent or cancelled in some states? Do the wealthy give or contribute in other ways, which aren’t measured as tax-related deductions? If the portion of church-related deductions could be separated from other charitable contributions, how would that affect the rankings?

Maybe the most interesting takeaway from The Chronicle of Philanthropy report is that the wealthy give a much smaller share of the their income to charity. Households earning $50-$75,000 gave an average of 7.6% of their income to charities, while households with incomes greater than $100,000 averaged only 4.2%.

This might be a significant argument against tax cuts for the rich, which conservatives argue would produce benefits for the less fortunate as the wealthy share their bounty through charity and investment. The data would seem to show that the poor and middle-class do a much better job of philanthropy, or at least they are putting their money where their mouth is.

Here are the state rankings from The Chronicle of Philanthropy report.

Chronicle

rank State Percent given Median charitable contribution Median discretionary income 1 Utah 10.6% $5,255 $49,551 2 Mississippi 7.2% $3,998 $55,264 3 Alabama 7.1% $4,007 $56,493 4 Tennessee 6.6% $3,807 $58,097 5 South Carolina 6.4% $3,429 $53,349 6 Idaho 6.4% $3,155 $49,606 7 Arkansas 6.3% $3,554 $56,539 8 Georgia 6.2% $3,396 $54,451 9 North Carolina 5.9% $3,132 $53,395 10 Maryland 5.7% $2,969 $52,482 11 Oklahoma 5.6% $3,116 $55,788 12 Louisiana 5.3% $3,252 $61,494 13 Texas 5.1% $3,284 $63,806 14 Virginia 4.8% $2,790 $58,288 15 Kentucky 4.8% $2,452 $51,233 16 Kansas 4.8% $2,800 $58,724 17 New York 4.7% $2,266 $47,910 18 Arizona 4.6% $2,436 $52,924 19 Florida 4.6% $2,610 $57,232 20 Oregon 4.6% $2,163 $47,450 21 Indiana 4.5% $2,451 $54,252 22 New Mexico 4.5% $2,495 $55,280 23 Michigan 4.5% $2,409 $53,568 24 Hawaii 4.5% $2,152 $47,965 25 California 4.4% $2,396 $54,030 26 Missouri 4.4% $2,456 $55,376 27 Delaware 4.4% $2,434 $55,490 28 Alaska 4.3% $2,622 $60,891 29 Illinois 4.2% $2,371 $56,113 30 Colorado 4.2% $2,317 $55,577 31 Wyoming 4.2% $2,550 $61,255 32 Nebraska 4.1% $2,323 $56,353 33 Washington 4.1% $2,319 $56,282 34 Minnesota 4.1% $2,213 $53,832 35 South Dakota 4.1% $2,524 $61,472 36 Ohio 4.1% $1,953 $47,796 37 Montana 4.0% $2,025 $50,535 38 West Virginia 3.9% $2,321 $58,944 39 Pennsylvania 3.9% $2,181 $55,661 40 Iowa 3.9% $2,190 $56,046 41 Nevada 3.9% $1,978 $51,350 42 New Jersey 3.7% $2,181 $59,113 43 North Dakota 3.5% $2,257 $65,270 44 Wisconsin 3.4% $1,747 $51,392 45 Connecticut 3.3% $1,916 $58,415 46 Rhode Island 3.1% $1,666 $53,181 47 Massachusetts 2.8% $1,652 $58,099 48 Vermont 2.8% $1,548 $55,204 49 Maine 2.8% $1,403 $50,076 50 New Hampshire 2.5% $1,497 $59,269

Source – “How America Gives”, The Chronicle of Philanthropy, 2012