Who are the most generous Golden Staters? Bah, humbug, Southern California. You’re trailing.
The tech titans and their brethren up north donated more than the movie moguls and their brethren down south, according to our most recent crunch of Internal Revenue Service data. Yes, we seek to quantify your compassion as the peace on Earth, goodwill toward men, open your wallet holiday season descends upon us.
Detail on more than 1,400 California ZIP codes reported by the Internal Revenue Service shows that the most generous Californians of all live in … drum roll please … San Francisco’s 94104, a little enclave between Chinatown and the Financial District, where folks donated 17.6% of their adjusted gross income to charity. That’s saying a lot, as the median income there was just $48,750, according to U.S. Census, Postal Service, IRS and other data compiled by UnitedStatesZIPCodes.org.
Next up was Palo Alto’s 94301, a neighborhood dubbed “Professorville” northeast of Stanford University, where folks donated 17.1% (and median income was $122,473); followed by Palo Alto 94304, mostly south of campus, where folks gave 12.9% (and median income was $103,971).
SoCal cracks the generosity list at No. 11, with Los Angeles’ 90049 in Brentwood, where folks gave 4.27% (on median income of $110,854); at No. 12 with Los Angeles 90077, aka Bel Air, donating 4.22% (on median income of $168,036); and No. 13 Orange County’s Corona Del Mar, 92625, donating 4.06% (on median income of $116,270).
Golden Staters gave more than $31 billion to charities in 2020, the most recent year available from the IRS.
That translates as more than $30 billion in itemized deductions, plus a smidge more than $1 billion from folks who don’t itemize, but who were allowed to deduct a few hundred dollars worth of charitable donations anyway that year, in an effort to boost giving during the throes of the COVID-19 pandemic.
You did pretty well, California. That $31 billion is a big boost from the $25.9 billion donated in 2019 (which was down from $26.4 billion in 2018), and a bit more than the $30.6 billion donated in 2017, according to IRS data.
But that’s not factoring in inflation. And the stock market was booming in 2017.
The folks at GivingUSA, who do this charity analysis thing for a living, point out that charitable donations always fluctuate over time, and are heavily dependent on external events, such as economic booms and busts and natural disasters.
“Giving did have a bump in 2020 and 2021,” Giving USA Foundation Chair Josh Birkholz said by email. “We attribute some of this to the pandemic. But some of it is also because of market gains in 2021.”
GivingUSA’s data is more up-to-date than the IRS’, and it found that giving by corporations and foundations has risen considerably between 2020 and 2022 — by 14.4% and 22.2% respectively — but is down for individuals and bequests (i.e., leaving things to charity in one’s will), by 1.2% and 3.4% respectively.
Who gets the money?
The IRS data doesn’t detail where all these billions go — but GivingUSA is all over that.
The biggest slice of the pie goes to religious organizations ($143.6 billion last year), followed by human services ($72 billion), education ($70.1 billion), gifts to grantmaking organizations ($56.8 billion), health ($51.1 billion), public society benefit ($46.9 billion), international affairs ($33.7 billion), arts and culture ($24.7 billion), environment and animals ($16.1 billion), gifts to individuals ($13 billion).
It’s been like that forever, more or less.
“In 2022, giving to international affairs went up while many sectors went down,” said Birkholz. “We mainly attribute this to the situation in the Ukraine. We do see the impact of events on giving.”
NorCal tech folks vs. SoCal entertainment folks? “Historically, entertainment has not been the most philanthropic sector by dollars, even though its impact in terms of awareness can be strong,” he said. “The first-generation wealth population, especially from the entrepreneurial class, has been the strongest individual performer in high-net-worth philanthropy. I would suspect the ‘tech titans’ in the north reflects this trend.”
But money isn’t the only way to give. There’s also volunteering — and in that, America may be experiencing a “generosity crisis,” according to several recent studies.
“In 2021, the formal volunteer rate — the percentage of adults who do unpaid work through or for an organization — experienced its largest decline since the U.S. government began collecting data on volunteering,” said a study by the University of Maryland’s School of Public Policy.
“In 2022, for only the third time in the last 40 years, the total amount donated to charity declined after adjusting for inflation. Yet, leading indicators of these results were detected several years earlier: the percentage of people donating to charity has declined steadily since the early 2000s, and the formal volunteer rate decreased during the early 2010s.”
Giving USA’s Birkholz said that, in both corporate and individual giving, we’re seeing a broader definition of generosity.
“While most of the data is giving to registered 501(c)(3) charities, people are giving to friends and family through crowdfunding and other means,” he said. “Corporations and individuals make social impact investing. DEI (diversity, equity and inclusion) initiatives and community volunteering activities by companies might be seen as doing good, but not reflective in charitable counts. Some would say generosity is as strong as ever, but giving has taken on different forms.”
Birkholz notes that, as overall donor counts continue to decline, dollar counts have continued to climb in all but a handful of years. The donor population has shifted to a smaller one with an increasingly higher net worth. Larger donors tend to be more motivated by movement in appreciated assets, so stock market movement has seemed to be the best predictor of giving, more than GDP and other income measures, Birkholz said.
“For example, in 2022 the GDP went up and employment numbers were good, but the stock market declined. In 2022, giving declined slightly (not as sharply as the market, but moved in the same direction),” he said.
With a smaller donor population guided by market gains and losses, one might expect more volatility in giving, he said.
Bigger than Mexico
Our data crunch found some interesting things. Consider:
- The adjusted gross income of Californians ($1.81 trillion) is nearly as large as the entire gross domestic product of Russia ($1.86 trillion), exactly the same as Mexico ($1.81 trillion), and larger than South Korea, Australia, Spain, Indonesia, Turkey and — well, more than 200 nations on Earth, according to data from the International Monetary Fund. Which is rather stunning.
- The average income per California return — think of this as per household — was $95,910, according to the IRS data.
- Charitable deductions averaged $1,655 per return, or 1.7% for the state in 2020.
The Top 50 most charitable ZIP codes included Pacific Palisades, 90272, Loma Linda 92354, Los Angeles 90067, Los Angeles 90025, Laguna Beach 92651, Encino 91436, Los Angeles 90036, Beverly Hills 90210, Los Angeles 90064, Pasadena 91105, Irvine 92603, Beverly Hills 90212, La Canada Flintridge 91011, Irvine 92614, Newport Beach 92662, San Juan Capistrano 92675, Inglewood 90305, Santa Monica 90402, Newport Beach 92663 and Carson 90746.
Clocking in the Top 100 were Villa Park 92861, Los Angeles 90024, Newport Beach 92660, Palos Verdes Peninsula 90274, Pasadena 91106, Los Angeles 90035, Riverside 92506, Los Angeles 90020, Newport Coast 92657, Newport Beach 92661, Westlake Village 91361, Los Angeles 90004, Manhattan Beach 90266, Brea 92823, San Clemente 92673 and San Clemente 92672.
Nonprofits play a vital role in delivering services, strengthening communities and boosting civic engagement in the U.S., according to research by the Urban Institute. Donations from individuals are essential to make that happen.
As you reach into your wallet this holiday season, consider donating time as well. There are food and toy drives in every neighborhood.
We can all take it upon ourselves to move our ZIP code up the list this season. Happy holidays! Be smart. Do good.
Source: Orange County Register