Rhode Island's Charitable Giving

The discussion about the northeast's charitable giving continues. Rhode Island, in particular, has traditionally done poorly in the Catalogue for Philanthropy's "Generosity index", which uses "average adjusted gross income (AAGI) to the rank of each state's average itemized charitable deductions". Rhode Island ranked 47th in the Generosity Index compiled from 2005 data.

The Catalogue for Philanthropy's methodology, however, has been criticized for failing to take into account regional differences in the value of a dollar and, in response, The Boston Foundation compiled an analysis of charitable giving in November 2005 that included state-level cost-of-living and tax-burden adjustments to income. Though the Boston foundation refused to rank the states, this is how I characterized the findings of their study…

The Boston Foundation's charitable giving metric places Rhode Island in the middle of the pack. States most similar to Rhode Island are Alabama, Alaska, Florida, Mississippi, Louisiana, Arizona and Montana.

Well, according to the Providence Business News, the Catalogue for Philanthropy has come back with a methodology of their own for insulating their results from cost-of-living concerns. In their most recent survey, the Catalogue looked only at charitable giving from earners guaranteed to have lots of disposable income no matter where they live, specifically, earners who reported an income of $200,000 or more. ($200,000 was also chosen, I suspect, as it coincides with the top range reported by IRS in its breakdown of number-of-tax returns by income level).

Guess who's dead last in charitable giving effort coming from the $200,000+ tax bracket…

Wyoming residents with incomes of $200,000 or more per year gave the most to charity in 2005, followed by residents of Oklahoma, South Dakota, Arkansas and Utah, the nonprofit Catalogue for Philanthropy said in its 11th annual report. Their peers in Rhode Island gave the least, followed by New Jersey, Alaska, Hawaii and West Virginia….

"Over the past 11 years nationwide, in the over-$200,000 income bracket, income increased 17.9 percent and charitable giving increased 24.6 percent. In Rhode Island, that income bracket increased by 6 percent, while its charitable giving increased 7 percent.", [said Martin Cohn, a spokesman for the Catalogue for Philanthropy].

Are our stingy upper-income residents making the rest of Rhode Island look bad? And perhaps more importantly, given that the numbers in the PBN story suggest about $80,000,000 missing from charitable programs (about $6,500-per-earner to bring Rhode Island up to level of other states, times about 12,000 tax returns of $200,000 or more, according to IRS figures), although there is no guarantee that all of this money would be going to local charities, doesn't this suggest that there is something to Governor's Carcieri's call for local charities to do more, not in terms of charities exerting greater effort, but in terms of local donors stepping up to give the charities more to work with?