Generosity Index - Is it valid?

Is this generosity index statistically valid? Does it give an accurate representation of the generosity of each state?

The methodology seems to be to measure average per capital charitable donations (as measured by tax-deductible giving) against average per capita income (also derived from tax returns). The higher the ratio of donations to income, the more generous the state.

It seems fair enough as far as it goes, but there are some limitations.

Are all forms of charitable giving in the US tax-deductible? I don’t know. The methodology obviously misses any non-deductible giving. It also presumably misses donations of time or work (volunteering, in other words), which is a signficant form of generosity.

Conversely, are all deductible donations equally generous? Again, I don’t know. Is it possible that I would get a tax deduction for, say, a donation to a charitable foundation, the purpose of which is to improve the already very good facilities at the exclusive school or college that my child attends? If I tithe 10% of my income to the local church of which I and my neighbours are members, and which spends the bulk of its income on services and activities from which I benefit or in which I participate, is that deductible? These may be worthy things to do, but as forms of generosity they’re not quite on the same level as donating money to a cause from which I and my family will receive no benefit whatsoever.

The ranking gives unfair weight to poor states. Let us say, hypothetically, that Mississippians give, say, 10% of their income to charities, and that such an amount would rank second in the rate of giving for all states. Under this scheme, their Generousity Index would be 48, because they rank 50th in “Having Rank.”

OTOH, let us say that folks from Connecticut, the number one state in terms of “Having Rank,” was also the number one state in terms of giving. Their Generosity Index would be zero. Even if Connecticutians (?) donated 110% of their income to charity, under this measure, their generousity index would be zero. There is no way that wealthy people could donate enough to be considered generous, under this way of ranking things.

The only thing useful about this chart is that it illustrates that sometimes, poor states have high rates of charitable giving. But it does not make valid comparisons between poor and wealthy states.

It’s well established that charity as a proportion of income varies inversely with income so such a study doesn’t really tell us much. What would be more useful was a measure of how much each person differed from the average for their income level grouped by state.

Probably not - no graph can measure character. If you think in terms of Red States and Blue States, the Blue (Democrat) states are mostly at the bottom - IIRC Iowa and California are near the middle.

Does this graph show inconculsively that all Democrats cheap? No - a lot of Democrats believe the government should be in charge of helping the poor/disadvantaged (through taxes), while conservatives think Churches, Charities, Rotary Clubs, etc should (generalizing.)

So Democrats may think the best way to help others is through paying your taxes - excessively.

Funny, the first thing I noticed is that the top ranked states seemed red. Was that the intention of the study?

I think it shows that Red states are poor.

Well, yes (I think). If they’re taking the numbers from all the tax returns submitted to the IRS, then they aren’t sampling but actually measuring the population. In that regard statistical significance is a moot issue because statistical significance has to do with estimating a population from a sample.

Whether the figures are meaningful or useful is another question.

As noted above, the rank relation approach is not very useful; a better approach with the data they have would be ranking by charitable donations as percentage of income (which I just happened to do with their handy-dandy Excel sheet). This gives pretty similar results on the overall list, shuffled around a bit of course, but it really shows the deficiencies in the rank relations system for the $200k+ income earners. Wyoming ranks first in having and giving on that sheet, but only gets a generosity index of 25, despite Wyoming residents giving 3.5 times as much as South Carolina residents (generosity index 1) on average and over twice as much as South Carolina residents as percentage of income.

A truly satisfactory answer would just require more data, though. Besides the volunteering and governmental programs mentioned above, you would also need to (and perhaps more importantly) adjust for cost-of-living. Giving $1000 out of a $30k income in a cheap state and a $50k income in an expensive state could represent the same amount of disposable income given to charity, but “looks” better for the cheap state in the above analyses.

Another thing to note is that their view of “Having” is pretty questionable. Connecticut is listed as #1 in the “Haves”, but the income distribution is heinously skewed so that a fairly small proportion of people in the suburbs adjoining New York are * amazingly * well to do, while the general population not so much.

I find it a bit odd to use raw tax returns. A single person with $30,000 of income is a bit different than a family of four with the same adjusted gross income (AGI).

There is a skew towards states without an income tax and low property values. Wyoming and Tennessee basically do not tax personal income and do not have the outrageous property prices. Because of that, the people that will itemize deductions on their federal tax return probably have high charitable contributions. You can see this with the lower rate of itemized deductions claimed on the return.

Notice that the average charitable deduction accross the country is pretty squashed into a range ($2500-$4500). Now, in the states that have nearly no other reason to itemize, the average is higher (Wyoming, Tennessee and Texas).

The exception seems to be Utah. They do have a very high rate of giving. As a guess, it has to do with the large Mormon population. Any methodology for rating giving will probably place Utah high on the list.

I have no good explanation why New Hampshire and Rhode Islands are so low.

Ok I’m sleepless and bleary eyed and I can’t make heads or tails of your math right now, but I think what you guys are saying is that if you graphed toilet paper expenditures the same way you’d come to the conclusion that poor people spend an excessive amount of time in the bathroom. Is that right?

It also misses charity given for those who don’t itemize their deductions.
It is possible (for those with a low enough income or without other deductions) to give a not insignificant percentage of that income to charity and still have the standard deduction be a better idea.

It also doesn’t account for the fact that a lot of what they refer to as “giving to charity” are actually offerings given to a church, which would explain Utah’s presence near the top of the “giving” category. In fact, I think that explanation covers a lot of the questions one might have about that list, including why rural areas are higher, etc.

I think that is the big factor. I’m not sure if giving to your own church should be considered charitable. It’s like building yourself a clubhouse.