The data in this special report, “How America Gives,” come from a comprehensive study The Chronicle conducted to examine giving data by ZIP code and by income level in every city and town in the United States.
The study is based on exact dollar amounts released by the Internal Revenue Service showing the value of charitable deductions claimed by American taxpayers. It is not based on extrapolations from spot surveys or statistical models.
Comparing levels of giving is always a challenge in part because the cost of living varies greatly across America. To provide a fair analysis, The Chronicle’s rankings show the percentage of their income that households donated from the money they had left after paying their taxes and covering housing, food, and other essential expenses.
The Chronicle obtained comprehensive tax records from the IRS for 2008, the most recent year for which such data are available, to examine income levels and the sums claimed in charitable contributions for taxpayers in each ZIP code.
The IRS releases total amounts donated, but to protect privacy, the agency does not provide data about the specific charities people supported. Because of discrepancies in the data for people with income below $50,000, The Chronicle’s study includes only taxpayers who reported incomes of $50,000 or more. Readers can use the online edition of this report to find detailed breakdowns, by income level, showing the percentage of income donated by people in various income brackets for each ZIP code.
Charitable-contribution figures are found in Schedule A, the tax form on which people seeking a deduction are expected to list the donations they made and the value of them.
Because taxpayers are allowed to claim deductions only if they itemize on their tax forms, no precise data exist to determine how much those who don’t itemize give. Nonetheless, the IRS data show an important picture of giving: The donations accounted for in the returns studied by The Chronicle account for about $135-billion of the $214-billion that “Giving USA” estimates individuals contributed in 2008.
Methods of Analysis
To determine discretionary income, The Chronicle started with adjusted gross income, which includes income from all sources less paid alimony, student-loan interest, tuition and fees, and a few other expenses.
From this amount, The Chronicle subtracted the amounts of taxes paid in federal income tax (less tax credits), Social Security and Medicare taxes, and state and local income taxes.
Also subtracted in the study:
- Median housing costs for homeowners and renters in each ZIP code, based on data from the U.S. Census Bureau. Housing costs include not just rent or mortgage payments but also real-estate taxes, property insurance, condominium fees, mobile home costs, utilities, and fuel. Those costs were adjusted for returns in different income categories.
- Average living expenses, which include food, clothing, transportation, healthcare, child care, and household expenses such as cleaning supplies. This information is collected by the Bureau of Labor Statistics and available by metropolitan area and region. The Chronicle applied those figures to ZIP codes that fall in the areas designated by the bureau.
Information from the bureau’s consumer spending survey was also used to analyze the impact of religious giving. That information is available only regionally and was applied to states within each region.
Readers should understand some of the weaknesses of data available about charitable giving. For example, because the study tracks giving as a percentage of income, some communities with large numbers of retired people appear to give a very high percentage of income. But such people are probably more likely than others to give from their savings.
To provide additional insights on giving, The Chronicle used data from the U.S. Census to examine demographic trends, such as age, educational attainment, and race and ethnicity. The Urban Institute supplied data on the number of charities in each ZIP code, used to determine the number of charities per 1,000 residents. Much of this information can be explored by ZIP code, city, county, or state in the online version of this study, which is available at philanthropy.com/americagives.
The Chronicle consulted numerous experts on giving and taxes to prepare this study. The newspaper’s approach was reviewed by Jon Bakija, professor of economics at Williams College; Tom Pollak, program director at the Urban Institute’s National Center for Charitable Statistics; and Philip Wirtz, chair of the department of decision sciences and psychology at George Washington University.
Other scholars who provided advice include Charles Clotfelter, director of the Center for the Study of Philanthropy and Voluntarism at Duke University; and Paul Schervish, director of the Center on Wealth and Philanthropy at Boston College.