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 Post subject: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 7:49 am 
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Do you think the rich are less charitable than the non-rich?

Quote:
A new study shows that middle-class Americans give a larger share of their income to charity than the wealthy.

The study, conducted by the Chronicle of Philanthropy using tax-deduction data from the Internal Revenue Service, showed that households earning between $50,000 and $75,000 year give an average of 7.6 percent of their discretionary income to charity.

That compares to 4.2 percent for people who make $100,000 or more. In some of the wealthiest neighborhoods, with a large share of people making $200,000 or more a year, the average giving rate was 2.8 percent.

Religion is the big factor here. "Regions of the country that are deeply religious are more generous than those that are not," the Chronicle said.

Red states give much more than blue states. The eight states where residents gave the highest share of their income to charity went for John McCain in 2008, according to the Chronicle. The seven-lowest ranking states supported Barack Obama.

The study will no doubt prompt controversy from both sides of the political aisle, with liberals saying the wealthy don't give (and therefore should be taxed more), while conservatives will say they give more than left-leaning states.

The study also feeds into the new thread of research that argues that the wealthy are meaner and more selfish than the non-rich. The Chronicle of Philanthropy study suggests that wealthy people who live in mixed-income areas give more and are more empathetic than those who live in exclusively wealthy enclaves.

There is one important fact that is missing from all of these studies. High-income earners still account for the largest share of giving. In 2006 taxpayers with incomes over $100,000 made more than half of all donations, according to The Economist.

Of course, they also make the lion's share of the country's income.

But when it comes to looking for the big money in philanthropy, the wealthy and high-earners should still be the largest target group for charities.

http://finance.yahoo.com/news/rich-less-charitable-middle-class-183805573.html

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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 8:52 am 

Joined: Fri Sep 12, 2008 12:29 pm
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Location: Seattle, WA
Eagle wrote:
The study, conducted by the Chronicle of Philanthropy using tax-deduction data from the Internal Revenue Service, showed that households earning between $50,000 and $75,000 year give an average of 7.6 percent of their discretionary income to charity.


I heard a story on NPR about this study. I don't think we can really evaluate the claim without knowing how they defined "discretionary income."


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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 9:34 am 
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Interesting finds:

1. "Red states are more generous than blue states." The eight top charitable states were Utah, Mississippi, Alabama, Tennessee, South Carolina, Idaho, Arkansas and Georgia all voted for McCain in 2008. On the other end of the spectrum were Wisconsin, Connecticut, Rhode Island, Massachusetts, Vermont, Maine and New Hampshire who all voted for Obama in 2008.

2. Surprisingly... "The rich aren’t the most generous. Middle-class Amer­i­cans give a far bigger share of their discretionary income to charities than the rich. Households that earn $50,000 to $75,000 give an average of 7.6 percent of their discretionary income to charity, compared with an average of 4.2 percent for people who make $100,000 or more."

3. People love to hate the 1%... Maybe there's a reason? "The 1 percent really are different. Rich people who live in neighborhoods with many other wealthy people give a smaller share of their incomes to charity than rich people who live in more economically diverse communities."

4. Also interesting: The study included only taxpayers who said they had incomes of $50,000 or more.

I travel to Michigan some for work but it seems that the cities up there are struggling significantly more than those in Texas.

As to the method stannius here's what I found...

Quote:
See: http://philanthropy.com/article/How-The-Chronicle-Compiled-Its/133667/

August 19, 2012

How The Chronicle Compiled Its Look at Giving Across America
By Emily Gipple

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.

Related ContentAmerica’s Geographic Giving Divide
Interactive: How America Gives
Generosity in the States
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.

Data Limitations
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.

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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 10:07 am 
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I have no doubt this study is true, for many reasons. It's not exactly news that religious people donate money to their churches all year, and probably to other charitable organizations. It's also not news that poor people tend to be more religious in the US.

I also don't really question the finding that "rich people are meaner" but I think there could be something else going on. I'm not sure if we qualify as rich. But we are very careful about the organizations we give money to and do a fair amount of due diligence rather than just giving money away. Basically, we apply the same scrutiny to "investing" in a charity as we do investing in a stock, bond, or mutual fund. That scrutiny has sometimes uncovered poor management or other issues that caused us to stop supporting the organization.

But, as useful as this information might be for charities attempting to raise money (because it tells them to target middle class and poor people), I don't really see the point of it to the general public. I'm not sure the interpretation of the general finding is as obvious as it is presented.

More fundamentally, is giving money necessarily good? If so, then maybe liberals are on to something. Maybe if giving is good then the government should require it. Maybe the government should take a percentage of everyone's money and use it to help the less fortunate. Oh, wait a minute...


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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 10:23 am 

Joined: Fri May 04, 2007 8:14 pm
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Eagle wrote:
Quote:
Religion is the big factor here. "Regions of the country that are deeply religious are more generous than those that are not," the Chronicle said.

Correlation does not imply causation. Maybe it means that the deeply religious aren't being blessed with wealth for some reason.


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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 1:18 pm 

Joined: Fri Sep 12, 2008 12:29 pm
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DoingHomework wrote:
But, as useful as this information might be for charities attempting to raise money (because it tells them to target middle class and poor people), I don't really see the point of it to the general public. I'm not sure the interpretation of the general finding is as obvious as it is presented.


Actually the summary (is the original study online somewhere) says that even though rich people give a smaller percentage, they still give more in overall dollars. So it's still probably the best strategy for charities to target the rich people.


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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 1:25 pm 

Joined: Fri Sep 12, 2008 12:29 pm
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Location: Seattle, WA
Here is another possible reason for this phenomenon:

NextDraft wrote:
2. Out of Sight, Out of Mind

According to a recent study from The Chronicle of Philanthropy, people who live in wealthy neighborhoods donate a lower percentage of their discretionary income than those who live in lower-income areas. If you want to predict how much someone will give to charity, just look at how close they live to people who need the help.


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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 1:52 pm 
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Ok, I now consider this report utterly meaningless. If it only looked at Schedule A filers then it is highly distorted. Most "rich" people file those because they have deductions. Most middle income and poor do not have enough deductions to overcome the standard floor. The ones that do are the ones who donate a lot.

There is nothing at all surprising about the results. It is exactly what one would expect from the methodology.


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 Post subject: Re: CNBC - The Rich Less Charitable Than Middle Class: Study
PostPosted: Tue Aug 21, 2012 3:33 pm 

Joined: Fri Sep 12, 2008 12:29 pm
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Location: Seattle, WA
I found something approximating the "study" "results":
Go to http://philanthropy.com/article/Interactive-How-America-Gives/133709
Click on Continue
Click on Giving By Income Level on the right

If you hover over the phrases on the right, a ? appears that you can click on.

They define discretionary income as "income earned after excluding taxes, housing costs, and other living expenses." I didn't find any further detail than that.

The report (at least at the link above) doesn't even include households with income less than $50,000.


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