Americans gave more to charities in 2012 than they did in 2006, which is great news for nonprofits, but a closer look at people’s generosity shows a puzzling — and somewhat upsetting — shift in behavior. The Chronicle of Philanthropy analyzed data from the Internal Revenue Service for donation figures and noted the trend in its recent “How America Gives” report.
As wealthy taxpayers’ incomes increased, their charitable giving didn’t keep up (according to donations claimed on tax forms, which account for about 80% of giving). Meanwhile, middle- and lower-income Americans gave a greater share of their incomes to charity.
In numerical terms it breaks down like this: People who earned $200,000 or more annually decreased the share of their income donated to charity by 4.6% from 2006 to 2012; those making less than $100,000 increased the donated portion of their earnings by 4.5%. Despite the seemingly backward trend, wealthy Americans donated $4.6 billion more than they did in 2006 (adjusted for inflation).
This isn’t necessarily an indication that wealthy people are withholding generosity (though it’s easy to see it that way). These figures could reflect a common budgetary habit. Say you make less money or keep the same salary as cost of living increases: You might not respond by adjusting all your spending habits. You donated $50 to your sister’s fundraiser last year, so you decide to donate $50 the next, or perhaps $60, as a sign of your commitment. At the same time, if you saw your income increase, you might increase your $200 donation to $225, not thinking about the fact that your 12.5% increase in donation doesn’t reflect the 20% jump in earnings you enjoyed since last year.
No one’s saying you have to bump up your charitable donations with every raise you get, either. Each person’s budget should suit his or her financial priorities, and the hope is you can spare some money for causes you care about. Keep in mind an organization must meet IRS qualifications for receiving tax-deductible donations, and you should watch out for scam charities looking to steal your money.
Whatever these figures mean about the attitudes of wealthy and non-wealthy people, there are some interesting points worth highlighting:
Utah earned the title as “most generous state,” as Utahns donate 6.56% of their earnings to charity, on average. New Hampshire is on the other end of the spectrum with donations accounting for 1.74% of incomes, on average. In 36 of the 50 largest U.S. cities, residents reduced their charitable giving over the course of six years, and residents of Las Vegas (a city hit hard by the recession) increased their giving most: It was up 14.9% from 2006 (about twice as much as second-place finisher Jacksonville, Fla.).
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