Findings from The Chronicle of Fundraising’s How America Gives Report

I continue to be fascinated by the number of studies, reports and analysis available that cover a wide-range of areas involving nonprofit fundraising and engagement results and strategies. Most recently I have written about the latest Blackbaud Index, Global Social Media Check-Up Reports, the 2012 Nonprofit Communications Trends Report and the Millennial Impact Report. Now a new study conducted by The Chronicle of Philanthropy can be added to these resources. The How America Gives report is based on giving data by zip code, state, metropolitan regions, income levels, political affiliation, religion and income throughout the United States.

The statistics and accuracy of the report come directly from information supplied by the IRS and consists of exact donation amounts claimed by taxpayers. To ensure an accurate analysis between regions, the report reflects the percentage of donation amounts compared against disposable income (income after taxes and general living expenses) to assess overall giving trends. A few things that are important to note include: 1) data is from 2008 as it’s the most recent that is available through the IRS; 2) it does not include a breakdown by cause or sector; and 3) it does not include incomes of $50,000 or less. The study analyzes 63% of the overall fundraising that Giving USA estimates to be at $214 billion.

The results of the report state that on average this grouping of American donors gives 4.7% of their discretionary income to charity, while more than a quarter (26.5%) give of their time by volunteering. Other aspects of the analysis that were interesting and worth noting include:

Image from How America Gives report courtesy of philanthropy.com

POLITICS– Political affiliation by state effects giving levels. The analysis found that “Red States are more likely to give generously” as these areas give +7% of their surplus income, while Blue states give less than 3%. The 8 highest ranking states in philanthropic giving were all Red States (in descending order): Utah, Mississippi, Alabama, Tennessee, South Carolina, Idaho, Arkansas and Georgia. Conversely, the bottom 7 states in the ranking were all Blue States (in descending order): Wisconsin, Connecticut, Rhode Island, Massachusetts, Vermont Maine and New Hampshire. Also interesting to note is that a majority of these blue states are in the North East.

RELIGION – It seems that religion is another key factor that has a huge influence on philanthropy. Utah is a very Mormon state and it tops the overall list with a giving average of 13.9% of discretionary income. It’s worth noting that it is Mormon custom to share 10% of income with the church. The other top 7 giving states aside from Utah are also deeply religious and reside in the bible belt. However, when religious donations are not factored into the analysis the giving landscape is much different. States in the North East region of the US climb up the rankings to much higher than their original standings and outperform the south by region: West (religion factored) 4.5% and (religion not factored) 1.1%; South (religion factored) 5.2% and (religion not factored) 0.9%; Central (religion factored) 4.3% and (religion not factored) 0.9%; and North East (religion factored) 4.0% and (religion not factored) 1.4%.

INCENTIVES – According to the report, this is a crucial time for philanthropy as the need is greater than it has been since social service programs are not as plentiful as before. The study identifies that it is important that local and state governments encourage giving as “13 states now offer special tax benefits to charity donors”. Charities residing in states that maintain tax policies that encourage giving definitely see a tremendous benefit to their donor revenue. For example Arizona based charities have seen revenue of over $100 million annually due to strong state tax policies. Ultimately, it seems that donors are driven by more than just the charity or the cause that motivates them to give. Tax breaks and incentives are a large motivator to give and give generously. These incentives can come in many forms, from tax credits for overall donations, to those specific to scholarships for private schools or endowment gifts to community foundations. There are many ways state governments can encourage giving and make it specific to the needs of the region and state to stimulate overall donor revenue.

The Chronicle of Philanthropy’s How America Gives report is one of the more thorough looks at nonprofit fundraising results and I will continue exploring its findings in my next post. Although this report is based on the USA, the results can be appreciated regardless of your geographic locations.

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