Wisconsin’s Most Generous County

Most surveys about charitable giving are notoriously inaccurate because of what the researchers call Social Desirability Bias. Giving to a charity is almost universally proclaimed as a pure and honorable act. So when a survey asks you to rate your own generosity, almost no one calls himself or herself cheap. Reliable data is hard to find when trying to measure any private action to which society has attached a strong moral value.

The Chronicle of Philanthropy, commonly known as the “newspaper of the non-profit world,” has found an answer to this problem when it comes to charitable giving. While we all might tend to over-emphasize our generosity when completing a survey, few of us are willing to lie on our federal tax return when faced with the pains and penalties of perjury. The Chronicle obtained from the Internal Revenue Service the anonymous tax return data of more than 35 million families that itemize their deductions. It’s a data set which is simply unrivaled both in its magnitude and its truthfulness. As a result, the recently published study entitled “How America Gives” offers the most comprehensive and thorough census of giving ever conducted.

The Chronicle began by sorting the data into individual zip codes. While the complexity of this is overwhelming, their rationale for breaking it down geographically is really quite simple.

Essentially, they were looking for a way to conduct an apples-to-apples comparison of what people give to charity. By starting with a person’s total income as reported on their tax return, then subtracting the average cost of living in that person’s particular zip code, you determine a family’s “discretionary income.” You can legitimately compare that number from one community to the next because it removes those required living expenses like housing, insurance, utilities, fuel, food, clothing, transportation, healthcare, childcare, cleaning supplies, and litany of other monthly bills that are far too long to be listed here which can vary greatly across the country.

The study then calculated the percentage of discretionary income that families gave to charity that was reported as itemized deductions on their tax return. Run that calculation across 35 million tax returns, aggregate it by zip code, and you can compare the relative generosity of whole communities using the most accurate and thorough data set on charitable giving ever assembled.

It should be noted that the study does not include families with annual incomes of less than $50,000 because few of them itemize their charitable deductions.

Let’s start with the good news. We can now conclusively prove what we’ve all thought for a very long time. Door County is the most generous county in Wisconsin. Period.

We Door County residents give an average of 4.1 percent of our discretionary income to charity each year. That edges out the 4.0 percent that is donated in the next most generous counties of Ozaukee, Milwaukee, Washburn and Sawyer.

It also dwarfs the average across all 72 counties in the state of Wisconsin where residents collectively donate an average of only 3.4 percent of their discretionary income to charity. Door County also is dramatically more generous than our neighboring northeast Wisconsin counties of Outagamie (3.2 percent), Brown and Kewaunee (3.1 percent), Manitowoc and Marinette (3.0 percent), and Oconto (2.7 percent).

Amazingly enough, despite our number one ranking in the state, a credible argument could be made that this study actually underestimates Door County’s level of giving.

This data is drawn from tax returns. As a result, charitable giving is reported in the zip code in which a family files their tax return. It does not at all account for where those gifts are actually directed. That’s not an issue for a community in which people both live and work all year round, but it has a dramatic effect on seasonal communities like Door County.

For instance, imagine how diminished charitable giving would be in Door County if we didn’t benefit from the generosity of seasonal residents. Yet in this study, if a seasonal resident does much of their giving in Door County but still files their tax return in their former county (or state, for that matter), then their generosity is counted there. If anything, the actual levels of giving in seasonal communities like ours is likely higher than what is included in The Chronicle’s calculations.

The study also breaks down giving by income category. One of the most fascinating statistics is that in the United States as a whole, the most generous subset of families are those with incomes between $50,000 and $100,000 a year. While the cash value of their gifts is obviously smaller than their wealthier counterparts, as a percentage of discretionary income, these moderate-income families are by far the most generous of all.

Across the country, families with incomes of $50,000 to $100,000 a year give about 40 percent more of their discretionary income to charity than families with incomes between $100,000 and $200,000, and families who earn more than $200,000 a year (both groups of which tend to give about the same percentage with small variations from state to state).

On the whole, we should rightfully feel good that Door County is the most generous of Wisconsin’s 72 counties. But here’s the dirty little secret. Door County’s 4.1 percent is still well below the national average of 4.7 percent.

While we might be the best in Wisconsin, Wisconsin as a whole ranks an abysmal 45th out of the 50 states when it comes to charitable giving. If we were to set a goal of moving up from 45th in the nation into the top 5 most generous states, that would require every Wisconsin resident to double the amount of money they give to charity each year. Clearly, we still have a lot of work to do.

Next time I’ll write more about the forces which make Door County the most generous place in Wisconsin, and examine some of the reasons Wisconsin is 45th in the nation.