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How Political Ideology Influences Charitable Giving

Category: Finance

Many issues seem to divide Democrats and Republicans, and new research has found one more: philanthropy.

Red counties, which are overwhelmingly Republican, tend to report higher charitable contributions than Democratic-dominated blue counties, according to a new study on giving, although giving in blue counties is often bolstered by a combination of charitable donations and higher taxes.

But as red or blue counties become more politically competitive, charitable giving tends to fall.

“There’s something about the like-mindedness where perhaps the comfort level rises,” said one of the authors of the study, Robert K. Christensen, associate professor at the George W. Romney Institute of Public Service and Ethics at Brigham Young University. “They feel safe redistributing their wealth voluntarily. It also matters for compulsory giving.”

The study was conducted by four research professors who set out to explore how political differences affect charitable giving. It was published on Oct. 20 in the academic journal Nonprofit and Voluntary Sector Quarterly. The other authors were Laurie E. Paarlberg of Indiana University–Purdue University Indianapolis, Rebecca Nesbit of the University of Georgia and Richard M. Clerkin of North Carolina State University.

The professors used a county-by-county examination of tax returns in 2012 and 2013 as the basis for their research and created a model to interpret the data. To focus on the effect that party affiliation has on philanthropy, the authors controlled for certain variables, including education, income, race, region and religion.

Dr. Christensen said the team had analyzed more than 3,000 counties, but it did not reveal the county-by-county breakdowns. “It’s hard to pull those counties out because of the control variables,” he said.

To gauge political ideology, the researchers measured the percentage of the population that voted Republican in the 2008 and 2012 presidential elections. They also measured political competition, or the vote share of a particular party in relation to other parties.

In examining tax returns that were itemized, they were looking at a more affluent slice of donors but not capturing all donations from a county.

The research raises questions about how living in a more diverse political community affects people’s generosity. The results may provide insight into the divisions of charitable giving after the midterm elections on Tuesday, particularly for seats in the House of Representatives.

“They’re taking steps toward science and away from just trying to find invidious comparisons, which has plagued other studies on the geography of giving,” said Paul G. Schervish, professor emeritus at Boston College and retired director of its Center on Wealth and Philanthropy.

Professor Schervish, who was not involved in the study, reviewed the research at the request of The New York Times. “It’s the most scientific paper on it, even though I have some questions,” he said.

Top among those was where the charitable dollars were going. A Republican county like Madison County, Idaho, for example, is one of the most charitable in the nation, but the data does not show whether those dollars are going to local causes or to organizations out of the county or the state.

Here are five major points in the study, and the authors’ theories to explain them.

The more Republican a county is, the more its residents report charitable contributions, the study found.

The researchers said this finding fell within the broad political tendencies of traditional Republicans who favor less government intervention and more donations from the private sector to make up for the lack of government assistance.

“Their preference is to provide for the collective good through private institutions,” said Professor Nesbit. “But we don’t know what type of institutions they’re giving to.”

Dr. Nesbit said they also did not know whether donors were being purely generous or whether they would also benefit from their donation. This relationship is called consumption philanthropy, in which people give to a religious organization or a school from which they will derive a benefit in the form of, say, a better religious education program or a new gymnasium.

Whether Republicans lived in a red county or a blue county affected their giving, the study found. Republican donors tended to give less in Democratic-leaning counties.

One theory was that taxes tended to be higher in counties where a majority of residents were Democrats. Republicans had less to give, and they were not persuaded to give more to reap a bigger tax deduction.

A second hypothesis is that donors do not necessarily have confidence in giving when their beliefs are not shared or the institutions they are giving to might support causes that are not theirs.

“If I’m a Republican and only in the minority, my preferences are not held in common or high regard,” Dr. Christensen said. “When they’re in the majority, they feel they can share their wealth this way.”

Charitable contributions may be lower in Democratic-leaning counties, but residents support the social safety net through higher taxes.

The study found that Democratic counties, like Holmes County, Mo., which is on the higher end of the giving spectrum, provide more over all to charitable causes, but through a combination of what the authors call voluntary giving, like charity, and involuntary giving, which the rest of us call taxes.

Taxpayers would seem to have little say in their tax-based funding, but opting to live in those counties shows a willingness to be taxed and have the government support causes they believe in.

“The county you live in and the political ideology of that county affects the tax burden of the community,” Dr. Nesbit said. “That in turn has an effect on charitable contributions. If you leave tax burden out of the equation, you’re not getting the full story.”

Higher tax burdens can drive down charitable giving as government policy crowds out private philanthropy, Dr. Christensen said. “Our evidence suggests that Republican counties are more sensitive to the crowding-out effects of taxation on charitable giving than Democratic counties,” he said.

Those in favor of lower taxes have argued that individuals are more capable than the government of allocating money to important causes, including people in need of assistance. But the study found that was not true. Donations do not match government assistance, and without tax money, social services are not funded as robustly.

“The evidence shows that private philanthropy can’t compensate for the loss of government provision,” Dr. Nesbit said. “It’s not equal. What government can put into these things is so much more than what we see through private philanthropy.”

On the other hand, private philanthropy can do many things better than government aid, as in being responsive to a need and willing to fail without political fallout.

The study’s authors make the case for a combination approach.

“They’re complementary means of redistribution of wealth rather than substitutions for each other,” Dr. Christensen said. “We can’t put all of our eggs in one basket.”

The concept of redistribution of wealth through taxes and charity remains polarizing. And for groups that want to continue to receive generous donations and organizations that want to be funded by government money, knowing how to navigate that polarization may be a good thing.

When counties are split evenly between the political parties, both donations and the tax burden go down.

Or in the study’s terms: Political competition decreases giving.

Dr. Nesbit said the findings called to mind the research by the social scientist Robert D. Putnam on racial diversity. Exposure to different people — especially in a homogeneous community that became more diverse — caused people to keep more to themselves, she said.

“That argument can be extended to philanthropy as well,” she said. “This high level of political competition decreases trust. That’s tied to all kinds of possible outcomes. And in these counties, people are keeping to themselves more.”

The study’s findings may be a resource for understanding philanthropic patterns in the United States — and a guide to where people will tolerate higher taxes. But those homogeneous communities will do little to get people from different political parties giving, let alone living, together.


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