Annual Donations Can Rise $27.5 Billion, 15% If Affluent Tax Filers Gave as Generously as Peers in the Most Charitable States
Newtithing Group
October 11, 2006
Individual charitable giving would rise nearly 15%, by $27.5 billion annually, if affluent income tax filers in forty-five states and the District of Columbia donated as high a proportion of their asset wealth to charity as do well-off filers in the most generous five states, concludes a landmark six-year study by NewTithing Group, a philanthropic research organization. If affluent income tax filers in only the five wealthiest states (California, New York, Florida, Texas, and Illinois) gave as generously as do their well-off peers in the five most charitable states, concludes the study, giving would increase $13 billion a year. Wealthy Californians and New Yorkers would account for $6.6 billion of the increase, which alone would boost U.S. individual giving by nearly 4%. The study estimates asset levels at year-end -- after living expenses -- and thus reflects differences in cost-of-living amongst states.
Based on IRS data for tax-years 1999-2004, the study suggests that the largest number of affluent tax filers (those with $200,000 or more in adjusted gross income) reside in California and hold an estimated $1.04 trillion in aggregate investment assets, followed by affluent filers in New York ($794 billion), Florida ($533 billion), Texas ($465 billion), and Illinois ($331 billion). The next five wealthiest states, whose affluent filers could collectively give an additional $5.7 billion, concludes the study, are New Jersey ($291 bill.), Pennsylvania ($280 bill.), Massachusetts ($266 bill.), Ohio ($189 bill.), and Connecticut ($187 bill.).
Measuring charitable donations relative to investment assets provides a meaningful gauge of generosity amongst the affluent, whose investment assets usually exceed their income. None of the wealthiest ten states, measured by the aggregate assets of affluent filers, rank within the top quarter of U.S. states for generosity adjusted for cost-of-living. Conversely, none of the most charitable ten states, those with wealthy filers donating the highest proportion of investment asset wealth to charity, according to the findings, rank within the top quarter for aggregate wealth. Utah, for example, contains the most generous wealthy filers, donating 1.63% on a relatively modest $31.29 billion in aggregate investment asset wealth, followed by Oklahoma (1.05%), Nebraska (1.04%.), Minnesota (0.90%), Georgia (0.88%), Wyoming (0.86%), South Carolina (0.85%), Colorado (0.822%), Mississippi (0.821%), and North Carolina (0.81%).
NewTithing Group's analysis of "Generosity and Per Capita State Spending - Affluent Filers" (Table 3a) explores whether relatively low state spending may boost generosity by increasing donors' sense of social responsibility. Though inconclusive, the analysis suggests that this question merits further study. According to the analysis, 80% of the most generous five states rank in the bottom half of the nation for per capita spending. Even the exception, Oklahoma, ranks near the bottom half of the fifty states and Washington D.C. in per capita spending:
* Utah ranks 1st in generosity and 48th in per capita spending.
* Oklahoma ranks 2nd in generosity and 22nd in per capita spending.
* Nebraska ranks 3rd in generosity and 32nd in per capita spending.
* Minnesota ranks 4th in generosity and 50th in per capita spending.
* Georgia ranks 5th in generosity and 42nd in per capita spending.
A possible link between lower state spending and greater generosity also holds, though less so, for the most generous ten states, 70% of which fall in the bottom half of the list of fifty states and Washington D.C. for per capita spending. The pattern holds less for the most generous fifteen states, 60% of which rank in the bottom half for per capita spending.
There are other notable exceptions to the pattern outside of the most generous states. New Hampshire ranks low in both generosity (49th) and per capita spending (43rd). Nevada and Delaware reflect similar rankings. Wyoming ranks high in both generosity (6th) and per capita spending (8th). The Dakotas also rank high in both generosity and per capita spending.
Wealthy filers in Georgia display the most generosity with the most wealth, donating 0.88% of $157 billion in aggregate investment assets wealth, putting them fifth in generosity and fourteenth in aggregate assets. Wealthy filers in Minnesota also have philanthropic clout relative to asset wealth, donating 0.90% of $99 billion, ranking fourth in generosity and 20th in aggregate assets. Half of "The Charitable Ten" are Southern states: Oklahoma (#2), Georgia (#5), South Carolina (#7), Mississippi (#9), and North Carolina (#10). In the West, three Mountain states appear on the list, Utah (#1), Wyoming (#6) and Colorado (#8). In the Midwest, two states earn the distinction, Nebraska (#3) and Minnesota (#4). In contrast, none of the New England states appear in even the top half of the generosity rankings. The full report, "Wealth and Generosity by State," at
www.newtithing.org, also allows donors to explore tax savings and donation strategies through PrudentPal® Charitable Giving Planner.
Founded and chaired by philanthropist and retired money manager Claude Rosenberg, NewTithing Group is a non-profit private operating foundation and 501(c)3 committed to educating the public on how to determine the maximum affordable donation levels.
