Are Potomac's Top Earners Also Tightfisted?
A study released by the Chronicle of Philanthropy shows that middle-class income earners donate a higher percentage of their discretionary incomes than top earners.
Are Potomac residents tightfisted charity-givers, compared to the rest of the country?
In a story published Monday, Patch reported that Maryland and Potomac residents donate a large amount of money to charities compared to other places. But another look at the numbers shows that residents may not be as generous as we'd like to think.
Marylanders donate on average 5.7 percent of their discretionary incomes, according to an analysis released Monday by the Chronicle of Philanthropy. Tax records from 2008, the most recent year for which IRS data is available, show that Potomac’s charitable giving comes in below the state average at around 4.4 percent of discretionary income or $8,695, according to the study’s analytics map.
Further break down of the numbers shows that the more income a family has, the smaller the percentage is donated.
Families making $50,000 to $99,999 per year are shown to donate 16.8 percent of their discretionary income, a percentage donation four times larger than families making four times more money. Families making $200,000 or more a year are shown to donate 4.2 percent of their discretionary income.
Looking at total money donated, Potomac’s giving looks a little more charitable. With a median income of $195,505, much higher than the national median income of $54,783 and the state median income of $52,482, Potomac residents contributed more money to charity than the state and national average – just over $6,000 more.
Maryland’s median contribution was $2,969, while across the country median contribution was $2,564. Potomac’s average donation was $8,695.
Potomac's total contributions to charity came in at $139.7 million for 2008.
The percentage story is similar in neighboring communities of Bethesda and McLean, Va., where those earning in the $50,000-$99,999 range donated 16 percent and 21.1 percent of their discretionary income, respectively. In fact, the Chronicle noted the difference in its study:
Middle-class Americans give a far bigger share of their discretionary income to charities than the rich. Households that earn $50,000 to $75,000 give an average of 7.6 percent of their discretionary income to charity, compared with an average of 4.2 percent for people who make $100,000 or more. In the Washington metropolitan area, for example, low- and middle-income communities like Suitland, MD, and Capitol Heights, MD, donate a much bigger share of discretionary income than do wealthier communities like Bethesda and McLean.
But what if Potomac residents across the board donated the same share of their income, say 16.8 percent?
By the study’s calculations, Potomac households earning $100,000-$199,999 would donate $12,379 instead of $3,817. Potomac households earning $200,000 or more would donate $69,209 instead of $17,361.
With a total of 13,963 returns in 2008, Potomac might have donated just over half a billion dollars to charities -- $525.5 million -- if all its income earners donated at the same percentage of its lower income earners.