Charity in America – Surprising Insights

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.

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

5 Replies to “Charity in America – Surprising Insights”

  1. Church donations should not be considered charity. A lot of churches use money for other than helping the needy. They spend it on rock concerts for their fellow church goers, lcd screens, projectors, large well buildings & then they sometimes use it to fund political campaigns -like ending gay marriage. Not necessarily a good thing when your donated dollars go towards hate.

    1. A lot of people share your views, Josh.
      Almost lost in the study was an interesting comment that when religious-based deductions are not included, the Northeast actually switches from the region with the least percentage of charitable deductions, to the region with the most.
      I wish there was more detail to examine this further.
      Best, Bert

  2. I am not surprised by the data in the report. This has been true for many years that the conservative citizens contribute more in the way of charity. They believe in self reliance and helping others on their own without wanting or expecting the government to step in. The closer that people live to tall buildings, the more liberal they become. This tells us that we should expect less from the large city citizenry and their charities because the more left one goes on the spectrum the more that reliance on government becomes their mantra. This reliance brings one to the conclusion that “I don’t have to contribute because the government will take care of all of the societal needs.”

    Most of these needs traditionally were handled by the churches and other charitable organizations. The government has had steady creep into these territories taking away from charities in the blue states while the red states have continued the tradition of the people helping each other in lieu of the government doing it. It is not all about faith as you surmise, it is more about self reliance – me relying on me to help others vs. the government doing it. History has shown time and again that the large central governments are not nearly as good at helping as the locals doing it themselves.

    The real question is within the low giving states, how many of the wealthy conservatives give? This may be hard data to find. I am a business owner for 20 years and all of my wealthy connections both personal and professional are firm believers in giving back some of the wealth they have attained. It is a cornerstone of our being. Our God given talents and treasurers are bestowed to us to see what we do with it. The more that I give to help those around me, the more my income goes up. Interesting correlation isn’t it. If not for the massively successful demonization of wealthy people by the left and the media in our country, attaining wealth in order to help those around you would still be a virtue pursued by the masses. So your conclusion that raising taxes on the wealthy will not have an effect is an erroneous conclusion if you are talking about conservative wealthy people.

    Go ahead and raise taxes on the wealthy left. They apparently think this is a great idea.

    1. Good point, Jerry. I’d love to see a breakdown of the charitable deductions. As it is, the numbers almost raise as many questions as they answer.
      Best, Bert

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