Philanthropic Giving Levels in Connecticut Among Nation’s Lowest As Percentage of Income

Connecticut ranked 47th among the 50 states in philanthropic giving as a percentage of income, with a “giving ratio” of 2.4 percent, 25 percent lower than the national average, according to a new analysis by the Chronicle of Philanthropy. The giving ratio is the total of a locality’s charitable contributions as a share of its total adjusted gross income. Among the states in the region, Vermont ranked 45th, Massachusetts was 46th, and Rhode Island was 50th.

Nationally, the Chronicle report “How America Gives” highlighted the growing influence of the affluent in charitable giving across the country.  Although charitable donations rose for the third straight year in 2016, reaching $390.1 billion, according to "Giving USA," the Chronicle study indicates the sources of those donations are changing.

Donations from households earning $200,000 or more now total 52 percent of all itemized contributions. In the early 2000s, that number was consistently in the 30s, the Chronicle reported.  The report raises questions about the traditional habit of charitable donations among middle and low income individuals lessening, perhaps as a lingering after-effect of the recession.

Connecticut ranked 20^th in total giving, despite having the 29^th largest population among the states, with average giving per itemizer of $5,229, which placed the state squarely in the middle, ranking 25^th.

The Chronicle provides an analysis of the giving patterns of Americans who earn $50,000 or more annually and who itemize charitable deductions on their income-tax returns. The itemized giving of these taxpayers, in 2015, represents nearly 80 percent of all individual charitable contributions and offers the best possible view into giving at local and regional levels, the Chronicle explains.

Nationally, only 24 percent of taxpayers reported a charitable gift, according to the Chronicle analysis of Internal Revenue Service data. That’s down from 2000 to 2006, years when that figure routinely reached 30 or 31 percent.  The Chronicle’s conclusion: “The number of households making room in their budgets for charitable giving is shrinking.”

In all but six states – including Connecticut – the percentage of those in the $200,000 plus bracket increased in 2015, the most recent year in which data was available. Only in Connecticut, South Dakota, Nebraska, Oklahoma, Texas, and Rhode Island was the percentage of those giving in that earnings bracket less that year, compared with 2012.

In Connecticut, individuals earning more than $200,000 gave 66.4 percent of all Connecticut giving, down 1.7 percent from 2012, according to the Chronicle analysis.  The portion of all givers in this income bracket in Connecticut down 0.2 percent while the giving per itemizer is down 20.6 percent.  In looking at the state’s major metropolitan areas, greater Bridgeport, Hartford, and New Haven, the analysis round that giving rates for taxpayers at four income levels fell below the average for the size group in each of the metropolitan areas.

The Chronicle reports that “Charity leaders say government funding has dwindled as corporate support has grown finicky. At the same time, America’s wealth has become more concentrated among the wealthy.”  The publication noted that “groups traditionally fueled by small gifts are also jumping into big-gift fundraising,” adding that “Middle-class woes and the country’s widening income disparity are undoubtedly partly to blame. But some fear that organizations are contributing to the problem by courting the well-heeled and slighting the small donor.”

The giving percentage varied across the state:  the Fairfield County giving ratio was 2.8%, New Haven County and Litchfield counties 2.1%, Hartford County 1.9%, New London County 1.8%, Middlesex and Tolland Counties 1.7%, and Windham County 1.6%.

Hartford Region Ranks 49th Among 50 Largest Metropolitan Areas in Charitable Giving

The average percentage of income given to charity by residents of the Hartford metropolitan region ranked 49^th among the top 50 largest metropolitan regions, according to a new survey by the Chronicle of Philanthropy.  Only residents of the metropolitan Providence, Rhode Island region donated less. Greater Hartford residents, on average, donated 1.9 percent of their income to charity according to the analysis.  The average amount given, among those itemizing gifts, was $2,994.  The total in Itemized contributions among the region’s 1.2 million people was $600 million.

In Providence, $600 million was donated with an average gift of $2,748, or 1.8 percent of individual income.  The Providence region includes 1.6 million people.

Both cities are among the 60 of America's 100 largest metropolitan areas that give less than the national average of 3.1 percent.

The Chronicle used 2015 Internal Revenue Service data on individuals who earn $50,000 or more annually and who itemize charitable deductions on their income-tax returns to create a snapshot of giving in every county and metropolitan area in the country. Only donations of taxpayers who took a deduction are included, the publication noted. The key measure, according to the Chronicle, is the giving ratio: the total of a locality’s charitable contributions as a share of its total adjusted gross income.

The metropolitan regions with the largest average percentage of income to charity:  Memphis (5.6%), Salt Lake City (5.5%), Birmingham (5.4%), Atlanta (4.6%), San Jose (4.6%), Jacksonville (4.2%), Nashville (4.0%), and Oklahoma City (4.0%).

Five years previously, in 2012, Hartford ranked last among the 50 largest metropolitan regions.  The giving rate that year was also 1.9 percent, reflecting an 89.9 percent decline in giving rate since 2006.  Providence was 49^th that year.

Overall in 2015, only 24 percent of taxpayers reported on their tax returns that they made a charitable gift according to the new analysis of Internal Revenue Service data. A decade earlier that figure routinely reached 30 or 31 percent, the Chronicle pointed out. Study authors suspect the numbers come from economic fears in the wake of the Great Recession, and a higher cost of living.

Changing Leadership Atop Leading Philanthropy Organizations

Two leading organizations in Connecticut’s philanthropic community are at the crossroads of leadership changes.  The Connecticut Council for Philanthropy (CCP) has announced the end of its national search for a new leader with the selection of Karla Fortunato to be its new president, effective May 1.  The Hartford Foundation for Public Giving, one of the nation’s largest community foundations, has embarked on its own national search, and announced that Yvette Meléndez has been appointed interim president, effective March 20, as that search process continues. Fortunato comes to CCP after 13 years at the Health and Environmental Funders Network (HEFN), a national alliance of 60 philanthropic organizations based in Rockville, MD.

As director of HEFN, she has managed its programming, outreach, and operations, promoting collaboration on shared goals among its members.  Fortunato previously served as associate director of policy for Health Care for All in Boston, engaging in policy research, communications, and campaigns, and as a consultant for The Public Policy Institute, also in Boston.

"Karla's experience in building alliances among funders and engaging in public policy outreach make her ideally suited to lead our organization," said Judith Meyers, chair of CCP's Board of Directors. "She is a proven leader with a strong vision of how to mobilize the power of philanthropy to effect positive change--and she has a true passion for the work."

Fortunato graduated magna cum laude from the Randolph-Macon Woman's College in Virginia and earned an MBA (also magna cum laude) from George Washington University. She serves on the Health Leadership Circle of MomentUs, a campaign for climate change solutions. She served as a member of the Serving Communities Committee of the National Conversation on Public Health and Chemical Exposures and as a citizen representative on the Montgomery County Citizen's Advisory Board. A native of Connecticut, she and her family look forward to relocating here from their current home in Jacksonville, Florida.

The Connecticut Council for Philanthropy (CCP) is an association of grantmakers committed to promoting and supporting effective philanthropy for the public good. CCP's 114 members are foundations (private, corporate, community), business and corporate giving programs, bank trusts, donor-advised funds, individual philanthropists and those serving the philanthropic sector. CCP members annually grant more than $858 million from assets of more than $7.6 billion.

Meléndez has served on the Hartford Foundation's board for close to 12 years, the last three as chair. She has more than 30 years of successful managerial experience in state government, higher education and at Hartford Healthcare, from which she is recently retired. She will take a leave of absence from the board during this time, and will serve as interim until a new president is named. Meléndez is not a candidate for the position. Linda J. Kelly announced her retirement as president of the Hartford Foundation for Public Giving, last March, effective next month, after 10 years leading the organization.

The Hartford Foundation for Public Giving is the community foundation for Hartford and 28 surrounding communities.  In 2015, the Foundation celebrated ninety years of grantmaking in the Greater Hartford region, made possible by the gifts of generous individuals, families and organizations.  It has awarded grants of more than $680 million since its founding in 1925.

PHOTO:  Karla Fortunato (left), Yvette Meléndez (right)

Nearly 2/3 of Americans Have Confidence in Charities, But More Than 1/3 Don’t, Survey Reveals

Almost two-thirds of Americans have confidence in charities, according to a new poll by the Chronicle of Philanthropy — the first to measure public views on the subject since 2008. Although most expressed “a great deal” or “a fair amount” of confidence in charitable organizations and more than 80 percent said charities do a very good or somewhat good job helping people, dissatisfaction was also expressed.  A significant number voiced concern about finances: a third said charities do a "not too good" or "not at all good" job spending money wisely; and 6 in 10 said their leaders are paid too much, the Chronicle reported.

Half of those surveyed said that in deciding where they will donate, it is very important for them to know that charities spend a low amount on salaries, administration, and fundraising; 34 percent said that was somewhat important.  And 35 percent said they had little or no confidence in charities, the Chronicle underscored.

Maggie Gunther Osborn, President of the Connecticut Council for Philanthropy, points out that “in a new and positive era of transparency, better questions are being asked and more data provided about the positive impact of charities.  The sector is being asked to more openly communicate and be accountable to the public trust.  This is a good thing.”

“At the same time,” she added, “outliers and bad actors are publicized and amplified, tarnishing the sector and creating misinformation and incorrect perceptions.”

People who gave charities low marks on spending money wisely were asked what kind of spending they considered unwise. The biggest portion, 37 percent, cited salaries or other administrative costs. The second-highest answer, named by 11 percent, was advertising.

Mary Cahalane, a Connecticut-based nonprofit fundraising consultant and author of the blog Hands On Fundraising, said that “Charities need to do a better job explaining the importance of our work to the general public. Surveys like this are instructive.”

The Chronicle poll, conducted by Princeton Survey Research Associates International, surveyed 1,000 adults in June, asking several questions identical to those included in polls that Princeton conducted from 2002 to 2008.

Americans rank charities higher than a range of other institutions. Fifteen percent said they had a great deal of confidence in charitable organizations over all, with 21 percent stating the same about charities in their own communities. Other institutions did not fare nearly as well.  In a June Gallup poll, only 4 percent said they had a great deal of confidence in Congress, 9 percent in big business, 10 percent in newspapers, and 12 percent in banks, public schools, and organized labor. The top scorers: the military (42 percent) and small business (34 percent), the Chronicle reported.

The survey found significant demographic differences in views toward charities. For example, young people were more positive than older people: 65 percent of 18- to 29-year-olds said they had a great deal or fair amount of confidence in charities, compared with 54 percent of people ages 65 and older. Republicans were more likely than Democrats to say nonprofits do a not-too-good or not-at-all-good job spending money wisely (38 percent and 22 percent, respectively), the Chronicle noted.

“Even the politicians are trying to highlight outliers in the sector to make statements about the whole which are creating false perceptions and in fact end up undermining the social purpose sector and creating false understandings,” Osborn explained.

“It also undermines the ability of the sector to continue to care for the most vulnerable, lift up and advance our society through the arts and education and create ways to deal with safety, environmental and health shifts of enormous impact on our daily lives,” she continued.  “The majority of people, who have factual information or just faith, support and believe in the powerful good of the sector.”

Cahalane also noted three thoroughly debunked myths about charities, which nonetheless remain widely held, are reflected in the survey results:

• Myth #1: Charities should spend every dollar on direct service. This has been called the “overhead myth”. Services can’t happen without administrative and fundraising support. Charities should spend money wisely, but looking at a ratio of service versus administration expenses is not wise. The largest watchdog groups have realized this, she points out.
• Myth #2: Nonprofit staff don’t deserve to be paid for their work. Many staff people have years of specialized experience and skill. This is their profession, and they deserve to be paid fairly for their work. If charities are to run well, skilled people are needed to do the work. A few egregious examples of high executive salaries shouldn’t fool anyone: most in the industry make considerably less than they would in the for-profit world, Cahalane explains.
• Myth #3: People make giving decisions based on low salaries or administrative costs. Most do not. Most give to organizations that make a good case for giving - organizations that move their hearts and align with their values, she emphasized.

When asked in the survey about factors that influence their giving, the biggest portion, 68 percent, said it is very important the charity has evidence that its programs are effective. The other factors, in addition to the 50 percent who favored low overhead spending: the charity gets good ratings from watchdogs, 54 percent; it works on a cause that has affected me or my loved ones, 39 percent; it only occasionally asks for money, 27 percent; and I know people who work there, 24 percent.

In the survey, women had more confidence than men (66 percent to 57 percent) in charitable organizations, and college graduates had more than those with just some college (73 percent to 56 percent).  In 2008, 64 percent said they had a great deal or a fair amount of confidence in charities, compared with 62 percent in the new poll.

Update:  Additional Resource

National Conference in Hartford to Focus on Nonprofits, Philanthropy and Voluntary Action

The theme will be “Nonprofit and Voluntary Action in an Age of Turbulence” when more than 600 researchers, leaders and teachers from around the nation gather in Hartford later this week for the annual convention of ARNOVA – the Association for Research on Nonprofit Organizations and Voluntary Action.

As the leading organization supporting research and education in the fields of voluntary action, philanthropy, nonprofit management, and civil society, ARNOVA conducts its annual conference to create a public conversation on, as well as opportunities for presenting research about, pressing issues and vital opportunities facing the voluntary or nonprofit sector. It is considered to be both a showcase for the best and most current research, as well as a seed bed from which new research is born.

Scholars, practitioners and students from the U.S. and beyond will exchange knowledge about voluntary action, nonprofit organizations, and philanthropy – and Connecticut will be well represented among participants.   David Nee, representing the Connecticut Data Collaborative and Terry Edelstein, nonprofit liaison to the Governor will be among the panelists for a plenary session of the Conference.  Among those attending the national conference close to home are Kyle Barrette (UConn), Mary Bernstein (UConn), Ron Cretaro (Connecticut Association for Nonprofits), Robert Fisher (UConn), Richard Frieder (Hartford Public Library), Maggie Gunther Osborn (Connecticut Council for Philanthropy), Reinaldo Rojas (UConn), Homa Naficy (Hartford Public Library), Nmarasimhan Srinivasan (UConn), Rebecca Thomas (UConn) and Jun Yan (UConn).

The three-day conference (Thursday-Saturday) at the Connecticut Convention Center will include more than 100 sessions attendees can choose to attend.  Frieder will lead a session highlighting the Hartford Public Library’s Immigrant and Civic Engagement Project.  Cretaro will conduct a session devoted to outlining Connecticut’s Collaboration with Human Services Nonprofits.  Rojas will present Community Development and Its Socioeconomic Impact in Latino Neighborhoods.

Over recent decades, the public conversation at the conference – held last year in Indianapolis - has evolved to address new developments in the fields, including social entrepreneurship, social economy and all aspects of civil society, as well as to meet the needs of those who study and lead “the social sector.” ARNOVA’s Annual Conference is the largest gathering held regularly anywhere devoted to these matters, according to the organization.

Conference organizers report that roughly 80 percent of participants will be based in universities or colleges, and include leading scholars and teachers. Many also serve as community consultants and nonprofit board leaders. The remaining 20 percent will be staff or leaders of nonprofit or social-economy organizations, full-time consultants to those groups, and some who play other roles in the world of philanthropy.

ARNOVA’s work benefits all of society by helping generate the knowledge and perspectives that can make organizations and enterprises more effective. With a focus on teaching, we are also playing a key role in preparing the next generation of leadership. Special projects we carry out have directly addressed the needs of nonprofits and foundations in developing new knowledge and sustaining important conversations vital to refining and improving their practices and services. In short, a wide range of organizations and individuals seeking to serve the public good are strengthened by the work of ARNOVA and its members.

Among the conference sponsors are the UConn College of Liberal Arts and Sciences Department of Public Policy and the Hartford-based law firm of Reid and Riege.

Photo:  David Nee, Terry Edelstein, Ron Cretero, Richard Frieder