(The Center Square) – Minnesota is the third most charitable state in the U.S., according to a new report from WalletHub.
WalletHub divided 19 metrics into two categories in the report released this week. Minnesota ranked third for volunteering and service, and it ranked seventh for charitable giving. Overall, the North Star State falls behind Maryland and Utah.
Minnesota wins the silver medal for volunteer rate (45.10%) and portion of people who donate time (53%). It placed in the top 10 for 4-star charities per capita (.16), amount of money people would lend their neighbors in need ($299.18) and share of population who do favors for their neighbors (61.30%).
It ranked 16th for share of population fundraising or selling items to raise money (37.43%) and 17th for share of residents who engage in general labor (supply transportation for people).
The state ranks lower nationwide for volunteer hours per capita (18th, 30.87), share of population collecting/distributing food (22nd, 34.85%) and share of sheltered homeless (28th, 75.48%). On average, Minnesotans donate 1.24% of their income, ranking it 35th nationwide for the highest share of income donated.
Rutgers University-Newark School of Public Affairs and Administration Associate Professor and MPA Program Director Jiahuan Lu said the pandemic’s challenges for charities included increased demand for services, loss of revenue, unavailability of staff and volunteer due to labor shortages, and instability in the economy. The economy has especially hurt small, grassroots charities, he said.
“The one-two punch of COVID and rising inflation is difficult to duck for many charities,” James Madison University School of Strategic Leadership Studies Nonprofit and Community Leadership Concentration Director, Professor and Advisor Margaret Sloan said.
Paycheck Protection Program loans helped smooth workforce cuts, but 2022 has challenged many organizations that haven’t regained pre-COVID levels of engagement, she said.
“Add to this the extra stress of inflation and it creates a fiscal outlook that is difficult to navigate successfully,” she said. “With costs for basic necessities on the rise, individual households have less disposable income for charitable donations or discretionary expenses like event tickets.”
Charities are paying higher costs for fixed costs, supplies, equipment and rent and sometimes receiving less in private donations, so they have less money available to spend on programs, she said. Human service organizations have often faced increased needs for services and decreased funding for those needs, Sloan said. With rising inflation, workers might leave nonprofits for jobs with higher pay so they can pay their bills, fueling competition between nonprofits and industry, she said.
Brigham Young University Professor of Public and Nonprofit Management Robert Christensen said that while people have stepped in to help address needs the pandemic raised, donations are somewhat sensitive to the stock market’s strength. He said charities should consider economic confidence when they predict donations and realize that while donations are still high, fewer donors are from the middle class.
WalletHub reported that approximately 25% of the 400 surveyed Americans said they plan to be less charitable this year. About 40% of survey respondents said aren’t buying holiday gifts this year because of inflation, the survey said.