Stanford Social Innovation Review

Lies, Damned Lies, and the Generosity Index

The Giving Season is off to a dashing start and it’s time once more to, uh, shame people into giving to those less fortunate than themselves.  The good folks at the Catalogue for Philanthropy have released their annual Generosity Index which lists all fifty states in order of their munificence, and once again the tight-fisted New England states have clustered near the bottom of the list.  States in the Bible Belt, while perhaps not especially generous in their views toward gay people, nevertheless top the list of givers.  The purpose of the Generosity Index, according to Catalogue spokesman Martin Cohn, is to promote discussions about philanthropy.  Here’s how the organization’s website describes it:

We provide the relevant numbers on income and charitable deductions, and leave interpretation to others ,  in most cases, the media. We do not always agree with their interpretations, but we believe, on the basis of evidence, that all discussions of charitable giving are good, because they get people to think about philanthropy and in particular about their own charitable giving. We have found that this consideration increases giving, which is our purpose.

This, dear readers, is pure reindeer poop.  I challenge our colleagues at the Catalogue for Philanthropy to produce a single person who was spurred to give, or to give more, because of his state’s ranking in the Generosity Index.  If these penitents do exist, would all their changes of heart, if added together, come close to the amount it takes to produce and publish the Generosity Index year after year?

And there are other problems with the Index.  According to the Catalogue website, a state’s generosity ranking is determined by taking its “having rank” (based on average adjusted gross income or AAGI), subtracting its “giving rank” (based on average itemized charitable deduction or AICD), and calling this result the state’s “rank relation.”  The state with the largest rank relation is deemed the most generous.  But this simply defies reason.  Imagine three states, call them A, B, and C, with AAGIs of $9.98, $9.99, and $10, and AICDs of $.01, $9.50, and $9, respectively.  Counter to our expectations, state A would rank as more generous than state C, according to the Catalogue scheme.*

I’m not the first to criticize the methodology of the Generosity Index nor will I be the last.  The Index elides a great deal of research on the many factors that affect philanthropy (cf. Edward Wolff’s “The Economy and Philanthropy” in Philanthropy and the Nonprofit Sector).  Having been in the business of promoting giving, I worry most about the unwanted effects of trying to shame people into being more generous, of turning the exercise of charity into an annual media event that invites a caricature of New Englanders as stone-hearted people of the North.

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Note: This bit of holiday venting is cross-posted at Phil Anthropoid’s blog, Hail, Sons & Daughters of Carnegie.

* Isn’t the null hypothesis that our giving should increase linearly with our having?  If so, doesn’t it make more sense to determine a state’s generosity index by dividing its AICD (not its AICD rank) by its AAGI?  What am I missing here?