Maine’s low rank for charitable giving based on flawed data, locals say

Posted Jan. 16, 2013, at 12:42 p.m.
Last modified Jan. 17, 2013, at 8:26 a.m.

PORTLAND, Maine — Maine residents are among the least charitable in the country, according to data compiled by the Chronicle of Philanthropy.

Maine ranked 50th out of 50 states and Puerto Rico, with only 2.8 percent of discretionary income given to charity, according to the chronicle, which used IRS data from taxpayers who earned more than $50,000 and itemized their returns in 2008. Maine’s median income in 2011 was $46,033, according to the Census Bureau.

Maine didn’t do well in the other metrics either. Maine ranked 46th out of 51 when it comes to total contribution; Maine’s was $307.9 million. Maine ranked 51st out of 51 when looking at the median contribution from residents, which was $1,403.

Maine’s metropolitan areas also don’t fare well. Out of 366 metro areas in the country, Lewiston-Auburn ranked 365th for percent of income given to charity at 2.5 percent (the Lewiston-Auburn Metropolitan Statistical Area is all of Androscoggin County). Portland’s three-county metro area (York, Cumberland and Sagadahoc counties) ranked 361st with a percent of income given of 2.8 percent. Bangor’s metro area (Penobscot County) ranked 352nd out of 366 with a percent of income given of 3 percent.

The reasons behind Maine’s poor showing when it comes to charitable giving aren’t easy to nail down, according to Peter Panepento, assistant managing editor of the Chronicle of Philanthropy.

Brenda Peluso, director of public policy at the Maine Association of Nonprofits, posits that perhaps Maine’s relatively lower income levels are the cause of the low rankings.

Panepento doesn’t think so. The Chronicle’s data actually shows that lower-income people on average give a larger percent of their income to charities than high-income people, he said.

Religion may be part of the equation. The areas of the county with the highest rates of giving are also the most religious places, namely Utah and the Bible Belt. On a regional basis, people in the South gave roughly 5.2 percent of their discretionary income to charities, compared with 4.5 percent in the West and only 4 percent in the Northeast. Utah ranked 1st in percent of income given with residents giving 10.6 percent of their income to charities.

Removing religion from the equation has a dramatic impact on the numbers.

When looking at giving to secular charities, the Northeast actually becomes the most charitable, with taxpayers providing 1.4 percent of their discretionary income to secular charities, compared to only 0.9 percent in the South and 1.1 percent in the West, according to the chronicle’s analysis.

“When you pull religious giving out of the equation, New England actually scored a little bit better,” Panepento said. “When it comes to secular causes, you tend to do pretty well.”

The Chronicle data also fails to take into account the portion of charitable giving that comes from people who don’t itemize their taxes.

Peluso said 70 percent of people in Maine don’t itemize.

Panepento admits the Chronicle’s data omits charitable giving from people who don’t itemize their taxes. Doing so would be impossible to track, he said.

Joleen Bedard, executive director of the United Way of Androscoggin County, said it’s a tough time for nonprofits and charitable causes throughout the country.

“For a lot of nonprofits across the country it’s been difficult,” she said. “It’s a challenging environment. I think people’s disposable income isn’t where it used to be.”

Bedard also believes the Chronicle’s data doesn’t take into account all the small-scale giving from people who don’t itemize their tax returns. She also said the data doesn’t reflect the true nature of giving because it doesn’t include the amount of time and effort people contribute to charitable causes.

“I think the numbers don’t reflect the true picture,” she said.

Rick Vail, CEO of Mechanics Savings Bank in Auburn and chairman of the Central Maine Community College Foundation, said the Chronicle’s rankings “raised more questions in my own mind versus my ability to offer answers.”

One thing he knows for sure is that his own experiences don’t mesh with the story the Chronicle’s rankings seems to tell.

“In my own interactions, I’ve found Mainers and people in Androscoggin County to be pretty generous people,” he said.

Androscoggin County’s total contributions in 2008 were $16.1 million, ranking it 344th out of 366 metro areas in total donations, according to the Chronicle’s data.

One of the questions the rankings raises for Vail, and which he plans to bring back to his education foundation board, is whether Maine’s nonprofit sector is truly good at asking for donations. He said 90 percent of donations come from individuals, yet the majority of fundraising efforts go towards courting businesses and planning events.

Enticing individuals to give “is a harder approach,” Vail said. “You really need a strong infrastructure within a nonprofit organization to be successful there.”

The CMCC Education Foundation just recently hired its first full-time staff person to lead those types of efforts, Vail said.

Another aspect Vail believes may be missing from these numbers is that Maine is home to many wealthy retirees and second-home owners who may spend much of the year in Maine and give generously to charitable causes in Maine, but live elsewhere for beneficial tax purposes and, therefore, wouldn’t show up on this data.

For example, while Harold Alfond is a name synonymous with philanthropic giving in Maine, he was actually a resident of Florida when he died.

In a time of financial instability and shrinking municipal budgets, the states and cities with the most generous residents will come out ahead, according to Bruce Katz, vice president at the Brookings Institution and author of the 2006 Charting Maine’s Future report.

Katz told the Chronicle of Philanthropy that local governments should be finding ways to encourage charitable giving to make up for the public funding cuts to welfare programs.

“The need for individual giving is greater than it has been in modern memory,” he said.

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