Who are the nation's 'cheapstates'? Try the blue ones.

At this time of the year, charities of every shape and size are hunting for the most generous donors. To find them, the Catalogue for Philanthropy has a counterintuitive suggestion: Look in the nation's poorest states. That's because the Catalogue's Generosity Index for 2004 shows that giving as a percentage of income is highest in states where folks have the least to give. Mississippi - the nation's poorest in terms of average household income - ranks No. 1 in generosity, followed by Arkansas, Oklahoma, and Louisiana.

By contrast, residents of the nation's richest states appear downright Scrooge-like. Connecticut claims the highest average household income but ranks 44th in terms of percentage of income donated to charity. New Jersey and Massachusetts seem even stingier, ranking 47th and 49th respectively in giving, despite their second- and third-place rankings in income.

What puzzles some researchers is not just the parsimony of the wealthy states, but also the pattern. The same Northeastern "blue" states - those labeled Democratic at election time - have appeared near the bottom of the list in every year since the index began keeping track in 1997. And the same "red" - or Republican - states are always near the top. So is there something about geography that influences both voting and giving patterns?

Actually, it may have more to do with culture, especially religious habits.

"The reason low-income states give a lot is religion," said George McCully, president of Massachusetts-based Catalogue for Philanthropy, whose index uses 2002 IRS tax return data to compare each state's average itemized charitable deduction with its average adjusted gross income.

"They are tithing, evangelical Protestants, and they are giving in proportion to their income," he says. "Up here [in the Northeast], religion doesn't help our giving. I wouldn't say it hurts, but it doesn't help, either."

Few dispute such a connection between religious faith and giving; American religious institutions depend almost entirely on gifts from members. But even so, other factors - including race and denomination - also appear to influence giving.

A study released this year from the Giving USA Foundation and the Center on Philanthropy at Indiana University found that states with a high percentage of African-Americans tended to see higher averages of giving itemized as a contribution on tax returns, while states with a high percentage of Roman Catholics tended to see lower ones. But the study also found that giving tended to be higher in states where income from investments is a significant percentage of total income.

Based on the study, Patrick Rooney, research director for the Center on Philanthropy, rejected the notion of purely regional influences, such as a Southern or New England effect. Meanwhile, others have ventured to suggest that giving may be closely linked to a sense of gratitude.

"Old money" may be less generous

"Inevitably, our biggest gifts aren't from old money that comes with a feeling of right and nobility," said Wess Stafford, president and CEO of Compassion International, a Colorado-based relief agency for poor children. "Inevitably, it comes from people who have clawed their way up and remember what it was like to be on the brink of having nothing."

That affirms one of McCully's conclusions. In his view, New Englanders who have inherited wealth tend to "guard" it more than those who have created their own wealth. In fact, when the Massachusetts technology boom was creating young millionaires at a rapid clip in the late 1990s, private giving in the state doubled from $2 billion to $4 billion over four years.

However, unlike regions where tithing is the norm, New Englanders don't always seem to feel blessed with abundance. After the attacks of Sept. 11, 2001, and the recession that followed, frustrated fundraisers found the generous climate in New England had vanished.

"People have hunkered down because they're not certain of the future," said Frank Cook, president of Fund Consultants Inc., a fund raising consulting firm in Lincoln, R.I.. "For giving, you've got to have a good feeling about where you're going."

On that score, regional factors might make a difference. McCully says New Englanders - even in the best of times - are shaped by "thrift, individuality, and a 'stand on your own two feet' attitude."

But for people of other regions, a certain brand of faith might account for a feeling of confidence in the future and abundance that blue states tend to feel only when their economies are humming.

"I see men who've been drinking all night, have a dollar in their pocket and say, 'Hey Rev, take this and help somebody,' " says the Rev. Hezekiah Stewart, Pastor of Moody Chapel African Methodist Episcopal Church in Little Rock, Arkansas. "They've heard testimonies by people who were down and gave when they were down and showed that God blesses those who give."

A rising generation of big givers

Researchers admit tax return data reveal only so much. Better analysis is needed to account for the fact that high earners tend to itemize deductions more often than low earners, and high-tax states also produce more itemizations than low-tax states - both factors that can skew study results.

In addition, an index like the one produced by the Catalogue of Philanthropy takes no account of the higher cost of living in many of the higher-income states. (McCully argues that cost of living is not a consideration for the larger donors who account for most giving.)

But even as more sophisticated analyses are sought, charities will continue to court donors on all economic levels, and hope that in the tougher areas, the feeling of generosity among the newly rich might rub off on their neighbors.

"The whole culture of philanthropy and institutions of philanthropy are changing" with a rising generation of big givers, says McCully. "We're not sure where it will end up."
