COMMENTARY
I made the following comment on the LinkedIn page for The Chronicle of Philanthropy where the Explore How America Gives initiative was being introduced.

I understand the importance of philanthropy, and also understand the importance of the public sector (government) being adequately funded to provide the essential services and infrastructure that enables a functional society and economy. I do not see any reference to 'who' is funding philanthropy and to what extent this funding is subsidized by the prevailing tax regime.

I am reminded of the 'Thousand points of light' reference by George H. W. Bush in a speech at the Republican convention and the recent embrace of volunteer activities by Prime Minister Cameron in the UK. Yes ... volunteer activity is importand, and yes, philanthropy is important, but both should be accounting for in an appropriate manner.

One big question about philanthropy is the question of how much 'subsidy' from the government is included in every philanthropic transaction. It is normal for philanthropic disbursements to have a tax advantage to the donor, which also means a disadvantage to the government treasury.

One big issue with 'volunteer' activity is that there are consequences ... unintended or otherwise ... when goods and services are provided by volunteer activity. In most macro-economic metrics about economic activity such volunteer activities are ignored, yet they do have significant societal and economic implications.

I am aware, for example, that a large number of doctors and nurses volunteered to do work in Haiti after the earthquake. To my knowledge the very real value of this has not been compiled and reported. On the other hand the amount of 'money' donated to various organizations is a matter of record, albeit probably quite inaccurate and difficult to audit and verify. Unpaid professionals who do voluntter work are highly valuable, and their contribution should be treated as rigorously in performance metrics as those who are working in the money economy.

I am reminded of a recent advertisement by Exxon Mobile about support for an education program in the United States that they were supporting. The implied message was that Exxon Mobil had deep social responsibililty because they were giving to this program. What was missing is that if Exxon Mobil was to pay its 'fair share' of taxes, then the need for such philanthropy in the education space would not be needed. The idea that Exxon Mobil would like to support education is an argument for doing the right thing as a corporate citizen, and not merely using it for corporate PR.

Explore How America Gives

I'd like to invite you to check out an exciting new interactive tool we've developed to help nonprofit leaders and fundraisers get information about giving patterns in every state, county, city, and ZIP code in the United States.

How America Gives is a free resource that spotlights giving statistics across a variety of income levels and allows users to compare and share data about charitable contributions. You can access it here: http://philanthropy.com/givingmap

You are also invited to check out our exclusive How America Gives special report, which includes rankings, analysis, and much more: http://philanthropy.com/americagives

I'm interested to hear your feedback and to learn how fundraisers are using the data. And I'm also interested to hear other ideas about how The Chronicle can produce and share nonprofit data.

Thanks for your continued participation in our LinkedIn group -- and I hope you are able to explore and enjoy this new resource.

How America Gives

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.

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.