Summary of Ratings and Rankings

Ratings and Rankings for the Free to Give Index

Figure 1 presents the summary Free to Give Index scores, sorted from highest to lowest, for the fifty states. States with a score closer to 10 have policies that make it easier to start and run charities and to make gifts in the manner of one’s choosing.

Figure 2 shows the same data in a heatmap so we can see the geographic distribution of policy. Large coastal states tend to score worse on the index while Mountain West states tend to score better. But there are exceptions to the trend. Illinois and Mississippi, for example, score poorly relative to their neighbors while Indiana outperforms its neighbors.

Ratings and Rankings for the Three Subcategories

Table 1 presents the scores and rankings for each of the three subcategories of the index. The Broad Economic Policy Environment Subindex reflects states’ overall economic policy environment, with Wyoming (1^st), South Dakota (2^nd), Missouri (3^rd), Kansas (4^th), and Indiana (5^th) at the top of the list and Kentucky (46^th), Washington (47^th), Oregon (48^th), California (49^th), and New Jersey (50^th) at the bottom. In the Nonprofit Freedom Subindex, Texas takes the top spot, followed by Wyoming (2^nd), Idaho (3^rd), Montana (4^th), and Arizona (5^th). At the bottom of the list are New York (46^th), Rhode Island (47^th), Pennsylvania (48^th), Massachusetts (49^th), and Maryland (50^th). Finally, in the Donor Confidence Subindex, the top scoring states are Iowa, Montana, Kentucky and Kansas in a four-way tie, followed by Texas in (5^th). And at the bottom of that subindex are Pennsylvania, North Dakota, and Michigan in a three-way tie for 45^th place, then Illinois and Washington tied for 48^th, and California in last place.

Note that some states like Montana top more than one subindex while others like California are near the bottom in more than one subindex. While the subindices are conceptually distinct, they are empirically highly correlated. The correlation coefficient between the Broad Economic Policy Environment Subindex and the Nonprofit Freedom Subindex is 0.44, the correlation coefficient between the Nonprofit Freedom Subindex and the Donor Confidence Subindex is 0.41, and that between the Broad Economic Policy Environment Subindex and the Donor Confidence Subindex is 0.35.

Table 1: Free to Give Index and Subindices

State	Free to Give Index			Broad Policy Environment			Nonprofit Freedom			Donor Confidence
	Score	Rank		Score	Rank		Score	Rank		Score	Rank
Montana	8.00	1		6.33	6		9.54	4		8.13	1
Wyoming	7.85	2		8.34	1		9.58	2		5.63	18
South Dakota	7.52	3		7.89	2		7.80	11		6.88	9
Iowa	7.41	4		4.64	23		9.46	6		8.13	1
Indiana	7.35	5		6.83	5		8.34	9		6.88	9
Texas	7.33	6		4.91	18		9.59	1		7.50	5
Missouri	7.17	7		7.13	3		7.49	13		6.88	9
Nevada	6.71	8		4.57	25		8.06	10		7.50	5
Idaho	6.64	9		5.99	8		9.56	3		4.38	31
Kansas	6.57	10		6.95	4		4.64	35		8.13	1
Nebraska	6.54	11		5.06	16		9.32	7		5.25	21
Arizona	6.51	12		5.69	11		9.47	5		4.38	31
Utah	6.36	13		5.00	17		6.60	21		7.50	5
Delaware	6.28	14		4.56	26		8.90	8		5.38	20
Kentucky	6.08	15		3.50	46		6.62	19		8.13	1
Alaska	5.86	16		6.16	7		7.04	14		4.38	30
Louisiana	5.85	17		4.22	30		6.83	15		6.50	12
Oklahoma	5.76	18		4.42	28		6.62	18		6.25	16
Colorado	5.74	19		5.98	9		6.62	20		4.63	29
New Hampshire	5.71	20		5.90	10		4.74	32		6.50	12
Vermont	5.51	21		4.02	35		7.52	12		5.00	24
Alabama	5.43	22		3.67	42		6.38	24		6.25	16
Georgia	5.28	23		5.08	15		4.27	39		6.50	12
Arkansas	5.26	24		3.60	44		4.68	33		7.50	5
North Carolina	5.23	25		4.75	22		5.68	27		5.25	21
Tennessee	5.00	26		4.85	21		3.65	44		6.50	12
Virginia	4.99	27		4.36	29		5.36	28		5.25	21
Maine	4.96	28		4.05	34		6.46	22		4.38	31
Florida	4.92	29		5.49	13		3.63	45		5.63	18
North Dakota	4.83	30		5.21	14		6.78	16		2.50	45
South Carolina	4.72	31		3.97	37		6.43	23		3.75	39
Hawaii	4.67	32		3.95	38		6.69	17		3.38	40
Ohio	4.67	33		3.73	41		6.28	25		4.00	35
Oregon	4.65	34		2.80	48		6.16	26		5.00	24
New Mexico	4.59	35		3.51	45		5.26	29		5.00	24
West Virginia	4.55	36		4.45	27		4.21	40		5.00	24
Wisconsin	4.45	37		4.58	24		4.77	31		4.00	35
Michigan	4.11	38		4.85	20		4.97	30		2.50	45
Rhode Island	4.00	39		3.74	40		3.27	47		5.00	24
Mississippi	3.93	40		4.11	32		3.67	43		4.00	35
Minnesota	3.83	41		3.99	36		4.38	37		3.13	41
Pennsylvania	3.73	42		5.55	12		3.13	48		2.50	45
Maryland	3.65	43		3.67	43		2.90	50		4.38	31
Massachusetts	3.63	44		3.91	39		2.98	49		4.00	35
Illinois	3.58	45		4.87	19		4.36	38		1.50	48
Connecticut	3.57	46		4.09	33		3.86	42		2.75	42
New York	3.41	47		4.13	31		3.34	46		2.75	42
Washington	3.18	48		3.40	47		4.64	34		1.50	48
New Jersey	3.03	49		2.46	50		3.89	41		2.75	42
California	2.73	50		2.76	49		4.57	36		0.88	50

Charity Policy and Charitable Activity

How does the policy environment affect charitable activity? In the wake of the recent increase in the federal standard deduction, most tax filers no longer itemize their charitable donations, which means there is no longer reliable data on individual charitable giving. So instead we gathered data on the number of charitable organizations per billion dollars of gross domestic product (GDP). Adjusting for economic size allows a meaningful comparison across states since both population and overall economic output strongly influence the number of charities that can be sustained.

Figure 3 shows a scatterplot with the Free to Give Index on the x-axis and charities per billion dollars of GDP on the vertical axis. Overall, the plot suggests there is a positive and statistically significant relationship between the Free to Give Index and charities per billion dollars of GDP. The regression line implies a one-point increase in the Free to Give Index, roughly the difference between Nebraska and South Dakota, is associated with seven more charities per billion dollars of GDP.

Figure 4 illustrates that same pattern in more dramatic fashion by comparing the top five and bottom five states in the index. Among the bottom five states there are an average of sixty-three charities per one billion dollars of GDP. But among the top five states there are 122 charities per one billion dollars of GDP.

Figures 5, 6, and 7 show the same comparisons using each of the three subindices. Figure 5 shows that among those states in the bottom of the Broad Policy Environment Subindex there are sixty-nine charities per billion dollars of GDP while among those in the top, there are slightly more than 100 charities per billion dollars of GDP. Figure 6 shows that among the bottom five in the Nonprofit Freedom Subindex, there are seventy-five charities per billion dollars of GDP while in the top five there are 101. And Figure 7 shows that among the bottom five in the Donor Confidence Subindex there are seventy charities per billion dollars of GDP while among the top five there are 105.

These results reinforce the conclusion that charitable ecosystems do indeed respond to barriers and incentives. While this analysis does not establish causality, it highlights a robust correlation between pro-charity policy and philanthropic entrepreneurship, echoing earlier findings that burdensome regulation can suppress the vitality and growth of the charitable sector (Winegarden 2023).