If the word “philanthropy” evokes images of older gentlemen who live in grand estates making large gifts to colleges, hospitals and social service agencies, think again. Because according to the Chronicle of Philanthropy’s recent “How America Gives” report, middle-income earners actually devote a larger percent of discretionary income to nonprofits. Additionally, higher-income donors who live in economically diverse ZIP codes, where more than 60 percent of residents make $200,000 or less, give an average of 1.4 percent more of their discretionary income to charity than those who live in more homogenously affluent areas.
|The How America Gives online resources include an interactive map that details giving levels, total contributions and many other details sorted by geographic areas.|
Locally, central Indiana’s relatively diverse income base reflects those trends. Residents who earn $50,000 or more a year and who itemize their tax deductions in the Indianapolis-Carmel metropolitan area donate 4.6 percent of their discretionary income. That giving rate is within .1 percent of both the national and state rates. For those who make $50,000 to $99,999, the rate is 5.5 percent, and Marion County residents at all income levels give at a slightly higher rate (6.1 percent) than those who live in surrounding counties.
The “How America Gives” study accounts for the different costs of living in communities, comparing giving levels after donors paid taxes, housing, food and other needs. However, other regional differences, such as religiosity and its link to donation patterns, also have an impact on giving. For example, donor rates are comparatively high in both the Bible Belt and states with high numbers of Mormon residents. If religious giving is excluded, several states in the Northeast would make significant shifts on the list. For example, Pennsylvania would go from being the fortieth “most generous” state in the nation to fourth.
Additional findings include:
- Nationally, families that earn between $50,000 and $75,000 give an average of 7.6 percent of discretionary income to nonprofits. The national average for those who make $100,000 or more is 4.2 percent.
- Overall, households earning $50,000 or more and itemizing deductions made two-thirds of donations by individuals, $135 billion total.
- States that promote donations with tax benefits are likely to see a positive impact in charitable giving.
Read more about local donors making a difference in central Indiana.