Despite, or perhaps because of the COVID-19 pandemic, the average American gave $608 to charity in 2020, according to new research from marketing and social media firm TOP Data. If they’re giving to charity, they’re likely also contributing to those 401(k)s as well.
Generosity seemed to rise over the holiday season in particular. The L.A. Times reported that on the Tuesday after Thanksgiving alone, people in the U.S. donated nearly $2.5 billion—up 25% from the year before, according to the GivingTuesday movement.
And the TOP Data study found that giving in December 2020 was up 25% over that in December 2019.
“With all of the economic uncertainty that has accompanied the pandemic, you’d forgive people for zipping up their pockets and looking out for number one. Well, that’s not happened,” TOP Data’s report states.
In previous economic crises, “we’ve seen charitable aid take a hit,” Benjamin Soskis, a senior research associate at the Center on Nonprofits and Philanthropy at the Urban Institute, told the L.A. Times. But during the pandemic, available data suggest, “people have actually increased their giving.”
The study’s survey, conducted on Dec. 30, also found 16% of Americans say they will donate all or part of their $600 stimulus check. Notably, due to a provision in the CARES Act, taxpayers can deduct up to $300 in cash contributions to charity on their 2020 tax returns even if they do not itemize. In past years, taxpayers had to itemize in order to claim charitable deductions. The CARES Act also temporarily suspends limits on charitable contributions.
Millennials were particularly generous in 2020, TOP Data found, with 74% of those aged 25-34 choosing to give to a good cause. Boomers (those aged 55-72) made the least donations, with 54% of them digging into their pockets. In between were Gen Z (66%) and Gen X (63%).
According to the study, some states—and regions—have decidedly more charitably inclined residents than others.
Utah, no doubt influenced by the fact that nearly two-thirds of residents are Mormons (who are asked to give 10% of their income to the church), was the highest-ranked state for charitable giving at $2,808 per person, over four times the study’s national average and well over twice that of the second-ranked state, which was Colorado at $1,100. Giving in Idaho, which ranked fourth, rose an astonishing 153% year over year (it rose 80% in Utah).
On the other end of the spectrum was Rhode Island, which ranked last in average charitable giving at $195 per person, far lower than second-lowest state Massachusetts at $309. Charitable giving dropped 43% in Rhode Island last year according to the study.
Here are the study’s top and bottom five (actually seven due to a tie) states:
Top 5
- Utah: $2,808
- Colorado: $1,100
- Virginia: $1,094
- Idaho: $1,031
- Alabama: $849
Bottom 5
• (50) Rhode Island: $195
• (49) Massachusetts: $309
• (48) New Jersey: $337
• (47) Maine: $424
• (46-tie) Illinois, Michigan, New York: $439
The TOP Data findings align at least somewhat with a recent WalletHub study of charitable giving by state, where Utah also topped the rankings and Rhode Island ranked 46th.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
