Wealthy American donors are contributing less to charity than their less affluent counterparts as the recovery from recession gains traction, according to a new study released this week by The Chronicle of Philanthropy.
The Chronicle reported that Americans continued to give on average about 3% of their income to charity in 2012, a rate that has been entrenched for decades.
However, the wealthiest Americans — those who earned $200,000 or more — cut back the share of income they gave to charity by 4.6% from 2006 to 2012, whereas those who earned less than $100,000 donated 4.5% more of their income during the same time period.
Middle- and lower-income Americans increased the share of income they donated to charity, even as they took home less pay on average than they did in 2006.
Still, charities depend on high-income supporters because their ranks are growing, the report said. Americans earning $200,000 or more in 2012 totaled 4.8 million, a million more than in 2006.
Total donations by the wealthiest grew by $4.6 billion, adjusted for inflation, reaching $77.5 billion in 2012, even as the share of income they gave shrank.
Donors who earned less than $100,000 gave $57.3 billion in 2012.
The Chronicle used IRS data to track gifts to charity at the state, county, metropolitan area and ZIP code levels among taxpayers who itemize deductions on their tax forms. Because people who itemize typically are the biggest donors, The Chronicle said, its data covered about 80% of the donations individuals made to charity in 2012, as tabulated by Giving USA.
State and Metro Area Changes
The Chronicle analysis found that Las Vegas residents who took a big hit during the recession increased their giving by 15% from 2006 to 2012, the biggest increase in the country. Jacksonville had the second largest increase, 9%.
Las Vegas’s growth helped propel Nevada to top spot among states whose residents increased their giving most from 2006 to 2012 — 12.6%. This was tempered by the fact that the state was recovering from a low level of giving in 2006. In 2012, Nevadans gave a middling 2.7% of income to charity.
Following Nevada, the states that experienced the biggest growth in the share of giving were Idaho (6.5%), Georgia (6.1%), Connecticut (4%) and Florida (3.9%).
Utah residents continued to be the most generous donors in the nation, giving $65.60 to charity for every $1,000 they earned. In contrast, donors in the country’s least charitable state, New Hampshire, gave $17.40 for every $1,000 they earned.
Thirty-six of the 50 biggest cities in the country experienced declines in the share of income residents donated to charity. Buffalo’s giving was down by 10.6%, the biggest drop.
Its decline was followed by those of Philadelphia (10.3%), Los Angeles and Washington D.C. (9.5%) and Minneapolis-St. Paul (9.4%).
Only two of the 50 biggest metropolitan areas gave more than 5% of income to charity in 2012 — Salt Lake City (5.4%) and Memphis (5.1%). The two least-generous areas were Hartford, Connecticut, and Providence, Rhode Island (1.9%).
Related on ThinkAdvisor: