Who Gives Most to Charity?

From Alaskan bush villages to center-city Manhattan, local-scale philanthropy unfolds every day in nearly all American communities. At first glance this modest, unsplashy, omnipresent giving may seem mundane. Yet such microphilanthropy leaves deep imprints in almost every corner of American life, due to its sheer density and the intimate ways in which it is delivered.

The fireworks show that delighted your town this week. The children’s hospital where the burned girl from down the street was saved. The ­Rotary scholarship that allowed you to become dear friends with a visiting ­Indonesian graduate student. The church-organized handyman service that keeps your elderly mother in her home. The park that adds so much to your family life. These gifts, products of modest offerings from local foundations or groups of community donors, accumulate in powerful ways to make our daily existences safer, sweeter, more interesting.

It is easy to think of philanthropy as something done by the very wealthy, or big foundations, or prosperous companies. Actually, of the $358 billion that Americans gave to charity in 2014, only 14 percent came from foundation grants, and just 5 percent from corporations. The rest—81 percent—came from individuals.

And among individual givers in the U.S., while the wealthy do their part (as you’ll see later in this essay), the vast predominance of offerings come from average citizens of moderate income. Six out of ten U.S. households donate to charity in a given year, and the typical household’s annual gifts add up to between two and three thousand dollars.

This is different from the patterns in any other country. Per capita, ­Americans voluntarily donate about seven times as much as continental ­Europeans. Even our cousins the Canadians give to charity at substantially lower rates, and at half the total volume of an American household.

There are many reasons for this American distinction. Foremost is the fact that ours is the most religious nation in the industrial world. Religion motivates giving more than any other factor. A second explanation is our deep-rooted tradition of mutual aid, which has impressed observers like Tocqueville since our founding days. Third is the potent entrepreneurial impulse in the U.S., which generates overflowing wealth that can be shared, while simultaneously encouraging a “bootstrap” ethic that says we should help our neighbors pull themselves up (partly because, in our freewheeling economy, we could be the ones who need help next time).

But what lies beneath our high national average? Do subgroups of the U.S. population vary in their giving, and if so, how much? What exactly do we know about who gives in America, and what motivates them?

Dissecting who is generous and who is not can be controversial. And not all of the research agrees. So we have methodically waded through heaps of studies and drawn out for you the clearest findings. You’re about to learn what today’s best social science has to say about the geography, demography, and economics of generosity in America. Some of it will surprise you.

How U.S. Regions Vary

There have been several attempts to compare the charitable giving of different U.S. states and regions. The most straightforward measures match the itemized charitable donations of local taxpayers to their incomes (both pulled from official IRS figures). The Fraser Institute and the Catalogue for Philanthropy have each used variations of this method to reveal what fraction of their annual resources residents are giving away to philanthropic causes, versus consuming or saving for themselves.

Top ten state: Fraction of their income that resident give to charity
Bottom ten states: Fraction of their income that residents give to charity

These “giving ratios” reveal a consistent pattern. Measured by how much they share out of what they have available, the most generous Americans are not generally those in high-income, urban, liberal states like California or Massachusetts. Rather, people living in states that are more rural, conservative, religious, and moderate in income are our most generous givers. (See the two charts above for listing of the top and bottom givers.)

This same pattern is seen in data very different from the IRS returns. The Panel Study of Income Dynamics is a high-quality microstudy of several thousand U.S. households that are representative of the national population, and whose characteristics have been tracked in detail by researchers over a period of years. When income and charitable giving are compared among this carefully documented group, the willingness to “give until it hurts” can be seen to vary sharply by locale.

American charitable giving by region: Mountain, East South Central: West North Central, West South Central, South Atlantic, Pacific, East North Central, Middle Atlantic, New England

In the PSID statistics, the top regions for donations as a percent of income are the Mountain West, the East South Central states (Tennessee, Alabama, Mississippi, Kentucky), the West North Central states (South Dakota, North Dakota, Iowa, Kansas, Minnesota, Missouri, Nebraska), and the West South Central states (Arkansas, Texas, Oklahoma, Louisiana). The least giving region was New England, closely trailed by the Middle Atlantic states (New Jersey, Pennsylvania, New York). The variations are not trivial: the top group of Utah, Idaho, Wyoming, Arizona, Colorado, Montana, ­Nevada, and New Mexico were more than twice as generous as the residents of New England or the Mid-Atlantic region. (See “Giving by region” above.)

Major study released

A third take on this topic was assembled by the Chronicle of Philanthropy. Its study “How America Gives” analyzed IRS income and giving data right down to the level of individual counties in the U.S. The researchers used the latest IRS returns available—2012 in their most recently published update. (More details on the results can be seen in Graphs 16 and 17 of this book’s “Statistics on U.S. Generosity” section.)

The results? Not much different from the portraits above. Using four large regional groupings, “How America Gives” reported that Southerners are America’s most sacrificial givers, while Northeasterners are substantially less generous.

American charitable giving in four major regions: south, west, midwest, northeast

Regional results are above. Below are the top and bottom ten states for giving, according to the Chronicle calculations. Once again, the biggest givers are found to be concentrated in “Bible Belt” states in the South or where Mormons make up a large portion of the population.
On the other hand, scant-giving households are heavily concentrated in relatively wealthy  and secular New England.

Top ten states for giving

This effect holds up not only across states but also in major cities. For instance, denizens of Salt Lake City, Birmingham, Memphis, Nashville, and Atlanta donate from 4 to 6 percent of their discretionary income to charity, while counterparts in Boston, Hartford, and Providence average just 2 percent. Silicon Valley is legendary for its wealth, yet lags badly in charity—the Chronicle data show San Jose and San Francisco falling near the bottom among our 50 biggest cities, giving away just 2.2 percent and 2.4 percent, respectively, of their income.

Bottom ten states for giving

There are about the same number of people in urban, high-education San Francisco County as there are in the rural, religious state of South Dakota, economist Arthur Brooks once noted. And families in these two regions give almost exactly the same amount to charity every year. Yet because the average family income is about $45,000 in South Dakota compared to $81,000 in San Francisco, the typical South Dakota household is actually giving away 75 percent more of its income every year than a San Fran counterpart.

Struggling to explain New England’s lag

A few years ago, some Bostonians chagrined by these findings created a study which tried to further “rebalance” the national statistics, which they felt did not fully reflect the willingness to give in their region. They used their own methods for adjusting income downward to compensate for high taxes and living costs, and they created estimates of additional giving by persons who don’t itemize their contributions on their taxes. Their results are quite different from all other measures.

In this more synthetic data, evidence of scant giving in New England remains, but the top and bottom groups are otherwise much more jumbled and difficult to see patterns in.

Boston-model re-estimates of top and bottom states for giving

The Boston data have not been widely embraced, for a variety of reasons. About 80 percent of all charitable dollars are captured in the itemized giving data from the IRS (which provide the backbone for the “Generosity Index” and “How America Gives” studies cited earlier). And a large proportion of the donations that are not itemized come from religious conservatives who do not reside heavily in the regions the Boston analysts aim to bolster. These factors leave many observers skeptical of statistical manipulations that re­order the clear trends seen in the IRS data—which are hard measures, not extrapolations or statistical models like the Boston numbers.

One intriguing pattern that emerges from the Boston data is a class stratification in New England when it comes to charitable giving. Among people making $100,000 or more in 2003, New Englanders were actually more generous than the national average. Yet among people in the middle-income band ($25,000 to $99,999), New Englanders fell below the national average in giving. And among the low-income (less than $25,000 of annual income in 2003), New Englanders were notoriously skin-flinty, giving at less than half the national average for that income group. All of this may reflect the region’s lower level of religious belief, a factor which, as we’ll see, dramatically lifts giving, even among the comparatively poor.

Red state versus blue state

A strong pattern that makes some commentators uneasy is the fact that, as Brooks put it, “the electoral map and the charity map are remarkably similar.” Or to quote the Chronicle of Philanthropy’s 2012 summary of its giving research, “the eight states that ranked highest voted for John McCain in the last presidential contest…while the seven lowest-ranking states supported Barack Obama.”

In addition to this political tinge, there are many other fascinating demographic and cultural patterns in the national giving statistics. For instance, the PSID survey shows that while New Englanders rank dead last in percentage of income donated to charity, their participation rate (fraction of the population who give something) is actually higher than in any other region. New Englanders reflect, and indeed may lead, the extraordinary American propensity to donate to others. They just don’t give as much as residents of other regions.

Some other results emerging from statistical regression of the PSID data: All other things being equal, the self-employed give less to charity. So do people who have moved residences more than the norm. Residents of rural areas and small towns, on the other hand, donate at higher levels.

Charitable giving's u-curve

The demographic characteristic most likely to increase giving to charitable causes is marriage. Compared to the unmarried, married households were 62 percent more giving in 2011. This was after all other factors like income, race, region, etc. were statistically adjusted for, using base data from the government’s Consumer Expenditure Survey.

Surprisingly, people who volunteer at secular organizations are a bit undergiving, in regressions of the PSID statistics. Meanwhile, persons who volunteer at religious organizations are dramatically bigger donors of money.

Religious practice is the behavioral variable most consistently associated with generous giving. Charitable effort correlates strongly with the frequency with which a person attends religious services. Evangelical Protestants and Mormons in particular are strong givers. Compared to Protestant affiliation, both Catholic affiliation and Jewish affiliation reduce the scope of average giving, when other influences are held constant.

Finer-grain numbers from the PSID show that the faithful don’t just give to religious causes; they are also much more likely to give to secular causes than the non-religious. Among Americans who report that they “never” attend religious services, just less than half give any money at all to secular causes. People who attend services 27-52 times per year, though, give money to secular charities in two thirds of all cases. (See page 1138.)

Sociologist Robert Putnam has chronicled the many pro-social and philanthropic overflow effects of religious practice. Not only is half of all American personal philanthropy and half of all volunteering directly religious in character, but nearly half of all associational membership in the U.S. is church-related. Religious practice links us in webs of mutual knowledge, responsibility, and support like no other influence.

Indeed, faith is as important as basic financial success in increasing giving. And religious conviction is often what separates one sub-group from another when it comes to charitable practice. For instance, African Americans, who are generally more religious than whites, are consequently 18 percent bigger givers when households of the same income, region, education, and so forth are compared.

Giving by income level

The curve charting charitable generosity by income takes on an unexpected U-shape largely thanks to the faith factor described above. People with means, as you might expect, are substantial givers. Middle-class Americans donate a little less. But the lower-income population surprises by giving more than the middle—and in some measures even more than the top. (As a percentage of available income, that is. In absolute dollars, those in higher income groups give much, much more money.)

The graph below combines results from six different studies of how giving varies as income changes. Each study uses somewhat different definitions of income, different universes of households, measured in different years, so they are not strictly comparable, but I have made some basic standardizations and converted results to present-day dollars so readers can observe the general trend uncovered by each of these analyses: If you measure charitable donations as a fraction of the donor’s income, giving is most robust at the top and bottom of the earnings spectrum.

People are generally more philanthropic toward the end of their lives, when they tend to have more savings, time, and motivation to help others. (Giving peaks at ages 61-75, when 77 percent of households donate, ­compared to just over 60 percent among households headed by someone 26-45 years old.) Some of the low-income givers charted on my “u-graph” are undoubtedly retirees who, while their annual incomes are modest, have accumulated wealth that allows them to be generous donors.

The other factor accounting for the high level of donations among low-­income Americans is that a significant minority of them are religious tithers who powerfully push up the group average through sacrificial giving. If you look at what fraction of each group gives, various studies show that the rate of donation among low-income persons is actually half or less of what it is for the rest of the population. Only about a third of low-income individuals give any money at all in a year. But those who are givers tend to be extremely generous, with a third or half of them giving at least 5 percent of their income. These sacrificial givers motivated heavily by religion are found much more among what might be called the working class (households making $25,000-$45,000 in current dollars) than among the truly poor.

The 1 percent

High-income households provide an outsized share of all philanthropic giving. Those in the top 1 percent of the income distribution (any family making $394,000 or more in 2015) provide about a third of all charitable dollars given in the U.S. When it comes to bequests, the rich are even more important: the wealthiest 1.4 percent of Americans are responsible for 86 percent of the charitable donations made at death, according to one study.

At the top of the income spectrum, charitable giving bumps upward both in dollars and as a fraction of income. The fullest study of wealthy donors is done every two years by the Lilly Family School of Philanthropy at Indiana ­University. The chart on the opposite page averages findings from three of its recent reports.

The very wealthy, this shows, give away a much larger chunk of their earnings than others. These robust rates of giving are elevated, however, by the extreme generosity of a subset of the rich. While donations to charity are almost universal among wealthy households (more than 97 percent make some annual gift, according to the Indiana data), data show that many of those gifts are comparatively modest. Others are extraordinarily copious—and these push up the donation average.

Portion of income that the wealth give to charity

If instead of the average percentage of income given away by wealthy households, we look at the median percentage (meaning that half gave more than this amount, and half gave less), the wealthy appear less magnanimous. From 2007-2011, the median wealthy household (having annual income of $200,000+ or assets of $1 million+) gave away 3.4 percent of its income.

Interestingly, when rich people live in separate enclaves they are not as generous as when they live interspersed in normal communities. The “How America Gives” study showed that when households earning $200,000 a year make up more than 40 percent of the residents of a particular ZIP code, they give just 2.8 percent of their discretionary income to charity. If they live in more mixed neighborhoods and towns, though, they give an average of closer to 5 percent.

Physical separation and economic stratification corrode social cooperation and generosity. In towns, villages, and cities where Americans of differing fortunes live in more traditional combinations, though, generosity flourishes. And for many Americans, the resulting giving seems to be deeply connected to satisfaction in life.

“I came to realize that expanding my philanthropic activities could be both meaningful and fun,” successful oil businessman Jim Calaway told Philanthropy magazine in 2015. “Making a lot of money and spending it on yourself is not a lot of fun,” he noted in an earlier interview with the Chronicle of Philanthropy. “What is a lot of fun is to live modestly so that you can give to the common good. That’s where happiness really lies.”