Thursday, August 30, 2012

How Does America Give?

There's been lots of attention in the philanthropy press recently about the Chronicle of Philanthropy's newly released study, How America Gives. It breaks down giving by state, city, religious and demographic group, etc.

I finally made the time to sit down today and read the Chronicle's report on its study (which was compiled using IRS and Bureau of Labor Statistics data from 2008, the most recent available year), and here are a few of the highlights that jumped out at me:

  • The top 5 most generous cities in America are Mormon strongholds or Bible-belt cities. In order, they are: Salt Lake City, Memphis, Birmingham, Nashville, and Atlanta. This confirms what we have known for a while - more religious people tend to give more. However...
  • When religious giving (giving to places of worship and religious causes) is not counted, the nationwide rankings change. "Some states in the Northeast would jump into the top 10 when secular gifts alone are counted. New York would vault from No. 18 to No. 2 in the rankings, and Pennsylvania would climb from No. 40 to No. 4."
  • Generally, the rich are not the most generous. Lower-income people tend to give a larger share of their discretionary income to charities. Those who make $50,000 - $75,000 give an average of 7.6%, while those who make more than $100,000 give an average of 4.2%.
  • Wealthy people who live in mixed income neighborhoods are more generous than wealthy people who live in wealthy zip codes. Fascinating! Put another way, the nation's most generous zip codes are not the wealthiest zip codes. Of the 1,000 zip codes whose residents give the biggest share of income to charity, only nine are among the nation's wealthiest 1,000 zip codes. So stop searching for donors only in the wealthy neighborhoods!
  • State tax credits and other incentives for charitable giving do increase giving.
  • Some nonprofits are focusing on courting donors overseas, where the impact of the recession is not being felt as strongly. Boston University, for example, has fundraisers traveling internationally, and approximately 20% of its early donations to a major capital campaign have come from overseas. Fundraisers are focusing on countries where new business growth is surging, such as the BRICS nations (Brazil, Russia, India, China, South Africa) and the Middle East.
  • (because I live in the Washington, DC metropolitan area) Prince George's County, MD, the wealthiest county in America with an African-American majority, has a higher share of donors than any other community in the Washington region. However, the total nonprofit revenue there is the lowest in the metropolitan region, in part because (1) there is a very strong tradition to church tithing, which means that some nonprofits don't get as big a piece of the pie, and (2) wealth in surrounding areas far exceeds that of PG County.
One of my biggest take-aways from this study is that organizations should start looking for generous people, not just wealthy people. Don't just look for donors in the richest neighborhoods, and don't focus on your current wealthy donors to the exclusion of less wealthy donors or prospects. Diversifying your donor pool will create more of a "hedge" to get you through the tough/lean times.

Lots more details (including how the Chronicle of Philanthropy compiled its data) can be found online at How America Gives.

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