State-level Differences in Charitable Giving in the United States

Abstract

Previous studies usually posit that heterogeneity in charitable giving within countries is less than the variation between them, yet the philanthropic landscapes in the states of the United States have more differences than expected. Substantial variations in both the level and rate of charitable giving exist across the states in the U.S., yet empirical evidence on why there are such substantial differences across the states is very limited and inconclusive. To address the gap in the literature, this study collected individual and/or state level data from multiple sources to answer whether and how state-level political, social, and cultural factors can explain the geographical variations in the level and rate of charitable giving across the states in the U.S. Based on statistical analyses using multiple regressions and multilevel modelling, the results indicate that state-level factors, including political ideology, public welfare expenditure, social capital, income inequality, and cultural capital contributed to the variations in both the level and rate of charitable giving at the state level. Specifically, state-level political ideology is found to have significant relationships with both the level and rate of charitable giving, while the marginal effects of political ideology on both the level and rate of charitable giving are moderated by the public welfare expenditure per capita at the state level. In addition, the density of associational organizations is found to consistently have a significant negative correlation with both the level and rate of charitable giving, while the impacts of the density of charitable organizations on both the level and rate of charitable giving are moderated by income inequality. This study contributes to the literature by revealing a more complex and nuanced picture on why there are substantial regional differences in both the level and rate of charitable giving across the states in the U.S. Specifically, the findings can help challenge the notions that “red (Republican-leaning) states are more donative”, that “higher density of nonprofits attracts more donations”, and that “government spending crowds out private contributions”. This study also shows the necessity to differentiate the impacts of the density of charitable organizations and the density of associational organizations on the level and rate of charitable giving at the contextual level1. What’s more, this study is the first empirical research that not only explored both the level and rate of charitable giving at the contextual level at the same time, but also compared the two stages of charitable giving, and revealed that different factors might behave differently on the level and the rate of charitable giving at the state level.