The wealthy are giving less to charity, while middle-income and poor Americans are giving more, according to a new report by the Chronicle of Philanthropy.
The How America Gives report released Monday shows that the wealthiest Americans — those earning $200,000 or more — gave 4.6 percent less of their income to charity from 2006 to 2012 even though their average incomes rose over the last six years.
Meanwhile, low- and middle-income Americans earning less than $100,000 gave 4.5 percent more as their incomes decreased or stagnated over the same six years.
Americans, on average, gave about 3 percent of their income to charity, a share that has not differed much for decades. However today, "that figure belies big differences in giving patterns between the rich and the poor," the Chronicle reported.
The study by the Chronicle of Philanthropy tracked IRS tax return data to determine giving patterns in the United States.
Who is giving more or less
The Chronicle found the recession was the underlying influence in the difference between giving among the rich and lower-income residents. Wealthy people tend to be cautious about giving during tough economic times, Chronicle editor Stacy Palmer told Forbes, whereas lower-income people tend to give more.
“It hits closer to home,” Talli Phillips of the Midnight Mission, a Los Angeles nonprofit serving the homeless people, told the Associated Press. “Any day, they too could become homeless.”
Palmer added that wealthy donors, overall, are more oriented toward support of the arts and higher education than lower-income donors, and less oriented toward support of social-service charities.
For the wealthy, tight economic times means fewer donation checks to the local theater, but for the middle-income and poor, tight economic times mean "seeing their neighbors lose their homes and jobs," the Chronicle reported. Those who see the hardships are compelled to help.
Although wealthier Americans are giving a smaller percentage of their income, the total amount they donated increased $4.6 billion over the six-year time period to a record high of $77 billion in 2012.
But as Jamie Phillippe, a senior official at Chicago Community Trust, told the Chronicle, “cultural-institutions giving has surged,” but “groups that provide necessities to the poor and hungry haven’t done well."
Where people give the most
The Chronicle’s study ranked states and cities by those who gave the largest share of their incomes to those who gave the least. The research revealed a religiosity pattern in giving: the most generous live in areas where religion is prominent.
Utah residents are the most generous in the country. On average, they donated $65.60 for every $1,000 earned. Behind Utah, the next most generous states are Mississippi, Alabama, Tennessee, Georgia and South Carolina — all states within the Bible Belt, an area noted for its social conservatism and high levels of evangelical, Protestant religiosity.
On the other side, states in the Northeast fill out the bottom of the list. The least generous states are New Hampshire, Maine, Vermont, New Jersey, Rhode Island and Massachusetts. New Hampshire residents gave $17.40 for every $1,000 earned.
Palmer suggests low giving rates in New England stem “in part from low rates of church attendance, but also from residents’ 'independent streak' and a tradition of self-reliance,” reports the Associated Press.
Resisting those stereotypes were residents of Las Vegas, Nevada, home of gambling and uncensored entertainment, and a city hit hard by the recession. Giving there increased by 15 percent from 2006-2012, the highest increase in the country.
Jessica Word, director of the Nonprofit Community and Leadership Initiative at University of Nevada Las Vegas, explained to the Chronicle that “the housing crisis caused many to put down roots in the city. Rather than swinging through town for a few years to enjoy the gambling and night life, many Las Vegas residents found themselves deeply in debt, holding underwater mortgages and unable to sell their homes.
"In response, charities placed an emphasis on attracting smaller donors,” she said.
On the other end, North Dakota saw the biggest decline in giving. Residents there reduced their giving by 16 percent. The Chronicle reported this will have “serious implications” in a state “where an oil boom has led to an influx of people who lack shelter, social services and other essentials.”
Other big cities like Buffalo, New York City, Philadelphia, Los Angeles, Minneapolis-St. Paul and Washington, D.C., showed a decline in share of income given of nearly 10 percent.
Nonprofits, like United Way — which saw a steep decline in the number of big donors giving $10,000 or more from 2006 to 2012 — are learning to adjust their campaigns to bring wealthy donors back.
Charities are working with researchers to alter their fundraising strategies. Researchers at Rutgers University explained that donors are more likely to give when presented with data that reveals the hardships of the working poor, the Chronicle reported. The stories of the working poor are more relatable, and therefore more compelling, to donors than stories of those in extreme poverty.
“When you tell them that (the recipients) are working people who are paying taxes, who are your children coming out of college and they’re the people fixing your car, all of a sudden people realize that these are people they know, who are part of the social fabric,” John Franklin, the CEO of United Way, said in the Chronicle report. “There’s more sympathy for them.”
United Way reported that the number of donors giving $1,000-1,999 jumped from 29 percent to 39 percent of total contributions in the same six years.
Those low to moderate donations were enough to get social-service charities through the roughest periods of the recession, the Chronicle reported, but they aren't enough to sustain organizations long-term. They need “all of the affluent to give more.”