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4 Takeaways From New IRS Charitable Contribution Data

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Once again, the  National Center for Charitable Statistics at the Urban Institute has researched and compiled an impressive brief utilizing massive amounts of tax data from the IRS. The brief titled “Profiles of Individual Charitable Contributions by State: 2012” was recently released and contains more than a wealth of data points.

The brief outlines the data from every itemized tax return with charitable donations filed in the United States. The most intriguing portions were the comparisons between states. Let’s explore some of the more vital facts:

1. 81% of Individual Giving

The brief is based upon the itemized tax returns from 145,847,260 individuals from all fifty states and the District of Columbia. These individuals only represent about 30% of all taxpayers in our country.

The total giving amount from these itemized deduction people was 195.3 billion dollars. According to the most widely quoted source, Giving USA, the giving from this 30% comprises 81% of all individual giving in the most recent reported year of 2013.

This fact aligns almost nicely with a data-point from the latest FEP (Fundraising Effectiveness Project) report – 88% of dollars raised comes from 12% of the donors – once again telling every fundraiser exactly where to focus their donor engagement and donor retention efforts!

2. Charitable Giving was 2.2% of Income

Over the years of reviewing charitable giving data one begins to realize that averages can represent a wide range of results. This is once again the case with the average percentage of income being devoted to charitable giving.

The lowest percentages were in Maine, North Dakota and Virginia at 1.3%. On the other side of the spectrum the clear leader with the highest percentage was Utah with 4.7%. Obviously, tithing is alive and well in certain parts of the United States.

3. Incomes From Individuals Itemizing Vary Widely By State

Before you read too much into the percentage of income donated to charity by individuals from each state keep in mind the large variance of actual incomes. Perhaps it is just tradition for certain states to have more individual itemizing even if they have lower income levels.

We certainly know that tradition plays a major part in what amounts are donated to charity.

The highest average income level was $88,804 in Connecticut. The lowest was $44,966 in Mississippi. The overall National average was $61,719. Hopefully, this helps bring the percentage of income given to charity to life.

4. Tax Deductions Seem to be Important

The overall takeaway from reading the brief is the notion that people itemize on their tax returns to take advantage of tax deductions. This is most likely not the only reason and perhaps not even the prime reason for itemizing, but nonetheless the large volume of charitable donations from itemizers leads us to the conclusion that the charitable tax deduction still plays a role.

This should be noted when future discussions about keeping or eliminating the charitable tax deduction take place.

Please let us know if you found other takeaways worth noting in the brief. Using such data can have a positive impact on future fundraising results and the establishment of proper goals for nonprofit organizations involved in fundraising.

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Jay Love
A 30+ veteran of the nonprofit software industry, Jay Love co-founded Bloomerang in 2012. Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth. Prior to starting eTapestry, Jay served 14 years as President and CEO of Master Software Corporation. MSC provided a widely used family of database products for the non-profit sector called Fund-Master. He currently serves on the board of the Center on Philanthropy at Indiana University and is the past AFP Ethics Committee Chairman. Jay is also the author of Stay Together: How to Encourage a Lifetime of Donor Loyalty.

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