CATHERINE RAMPELL

Dollars to doughnuts.

The richest Americans give a greater share of their income to charities than low- and middle-income Americans do, but the mix of beneficiaries is decidedly different, according to congressional testimony from Frank J. Sammartino, the assistant director for tax analysis from the Congressional Budget Office.

Mr. Sammartino’s testimony includes some interesting statistics on the history and distribution of charitable giving, as well as estimates for how various changes in the deductibility of donations might affect giving rates. I’ve pulled out some of the more interesting tidbits.

First, here’s a look at charitable giving by income class. As you can see, the wealthiest Americans — those making over $500,000 annually, which is less than 1 percent of all tax filers — gave away 3.4 percent of their income in 2008. That is significantly higher than Americans at lower income levels:

Source: Congressional Budget Office based on data from Internal Revenue Service, Statistics of Income Division, Individual Income Tax Returns 2008 (revised July 2010); the Federal Reserve Board’s 2004 Survey of Consumer Finances; and the Bureau of Labor Statistics’ 2002 Consumer Expenditure Survey. Note: Includes C.B.O.’s estimates of charitable contributions by people who filed income tax returns in 2008 but did not itemize deductions.

In total, giving by this top income class accounted for 24 percent of charitable donations from all taxpayers in 2008.

The destinations for those donated funds varied tremendously by income class, however. The most noticeable trend is that as income rises, proportional giving to religious organizations falls:

Source: Congressional Budget Office based on data from the Center on Philanthropy at Indiana University, Patterns of Household Charitable Giving by Income Group, 2005 (Indianapolis: Indiana University–Purdue University, 2007). Note a.: Combined purpose funds, such as the United Way, receive contributions and allocate them to many different types of charities.

In 2005, households with an adjusted gross income below $100,000 annually allotted 67 percent of their charitable giving to religious organizations, whereas households earning at least $1 million annually gave just 17 percent of their donations to religious organizations. The biggest recipients of this highest income group’s donations were instead educational and health organizations.

The federal government subsidizes charitable giving by making it mostly tax deductible. The Congressional Budget Office has estimated that this total subsidy in forgone tax revenues amounted to about $40.9 billion in 2006.

The taxpayers who receive the biggest chunk of this subsidy are upper-income earners, both because they are most likely to itemize their taxes (and so take a deduction for charitable giving) and because their marginal tax rates are higher. In other words, if a donor has a higher tax rate, the government has more potential tax revenue to lose by letting him or her write off donations.

Exactly how this subsidy affects people’s willingness to donate is hotly debated. Two studies cited by Mr. Sammartino’s testimony suggested that a 1 percent increase in the price of giving would reduce giving 0.5 percent to 1.3 percent.

That suggests that various proposals to reduce (or eliminate) the charitable giving subsidy would probably decrease donations at least a little bit. You can see the details for some of those proposals in Mr. Sammartino’s full testimony.

Article source: http://feeds.nytimes.com/click.phdo?i=2d20f4ec2135a93ebafaf39a1dfc6bee