Indexing Giving: Examining State-level Data about Itemized Charitable Deductions Using Known Determinants of Giving

Abstract

Average itemized charitable deductions by state are widely used as a measure of giving yet grossly misstate “generosity.” Extending a model initially developed by Gittell and Tebaldi (2004), this work finds that when considering state-level measures of economic and social factors determinant of individual giving at the micro-level, six of the 20 states said to be most generous on the popular “generosity index” have average itemized contributions at least 5 percent LOWER than their predicted giving capacity. Nine states in the bottom 20 on the “generosity index” have average itemized giving at or above the predicted levels. Further analysis using household-level survey data from the Center on Philanthropy Panel Study (a part of the Panel Study of Income Dynamics conducted by the University of Michigan) reveals significant differences in total secular and total religious giving by households in different Census regions (analysis is not possible at the state level using this data set). The secular and religious differences in giving largely account for the differing total amounts reported. The paper concludes with an appeal that generosity be evaluated as a percentage of income donated combined with percentage of households that donate in a given region.