HOW THE GENEROSITY INDEX WORKS *

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How the Generosity Index Works *

The 2003 GI data is on our website (www.catalogueforphilanthropy.org).  The word "Index" means only "indication", in accordance with its Latin root; the GI does not measure or compare philanthropic generosity as such, much less moral character of states or their populations.  It merely reports IRS numbers, from annual summaries of personal income tax returns—Average Adjusted Gross Income (AAGI—MA: $58,408 in 2003) and Average Itemized Charitable Deductions (AICD—MA: $3,122).  We use the IRS numbers not because they are ideal for the purpose, but because they are the only data frequently and freely available that include both income and charitable giving (ICDs capture about 80% of all personal giving).  We invoke both giving and income because philanthropic generosity is not how much one gives, but how much one gives in relation to how much one has. 

We then rank the two for each state (in 2003, MA was 3rd in AAGI, 39th in AICD), compare the ranks (MA: minus 36), and rank those differences (MA: 49th).  We do this to illuminate a fact: that nationwide, giving is not consistently related to income; rather, giving is shaped more by cultures, which tend to be regional, and by religion (not politics).  If all Americans were equally "generous" (in relating giving to income), those differences in rank would be zero—all states would be giving at the same rank as their income.  But the Bible Belt and Utah are, with generally low incomes, giving so much (as tithing evangelical Protestants), that in effect they set a high example, which suggests that the wealthiest taxpayers in the wealthy states can afford to give significantly more. 

This explains why in 2003 the top income group in Wyoming, which ranked 1st in both income and giving, ranked 26th on the GI for the zero disparity between those ranks; South Carolina’s top income group ranked first on the GI because from their low income—44th—they gave enough to rank 27th in giving—the largest positive disparity (+17) in the nation.  The GI is thus, because it ranks disparity, a system which gravitates toward the middle, not the top; if wealthier states’ giving increases toward their rank in income, poorer states’ giving ranks will necessarily approach their low income ranks; disparities between them will shrink toward zero—and the nation’s total charitable giving will increase substantially. 

*Catalogue for Philanthropy, Massachusetts 2005, p. 6.