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Charitable giving in West Virginia is growing, but still lagging behind other states

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When disaster strikes, West Virginians spring into action.

The state frequently is lauded for being made up of "doers" and "givers" who donate and volunteer on large and small scales, but when itemized charitable giving is analyzed, West Virginia doesn't look quite as generous.

West Virginia Grantmakers turns 20 this year. As part of its anniversary and upcoming annual conference, the group is looking at where the state stands in giving.

According to West Virginia Grantmakers President and CEO Paul Daugherty, West Virginia has made "substantial gains" in giving, but the state still has a long way to go to move beyond being a "philanthropic divide" state.

In 1993, when Grantmakers got started, West Virginia had about 140 foundations, without counting the Claude Worthington Benedum Foundation. Those groups counted collective grantmaking to the tune of $14.3 million. 

Daugherty explained that the most recent data is from 2011, due to delayed release of foundation tax return filings. The 2011 numbers show 300 foundations in West Virginia with grantmaking that has nearly tripled the 1993 numbers.

Ranking the state's giving

"In West Virginia, the 2011 figures are a recovery from 2010's itemized charitable giving figures, but itemized charitable giving still has not restored giving prior to the great recession of 2008-2009," Daugherty said.

West Virginia was placed in the bottom 20 of states in 2010 giving figures for itemized charitable giving, Daugherty said, and West Virginia's foundations will not be able to step up to fill the gaps left from any federal or state budget cuts.

In 1993, with a population of 1.8 million and 695,300 joint income tax filers, itemized charitable giving was $195,342,000, Daugherty said. In 2011, the population grew by about 40,000 people over the 1993 numbers for a total of 791,595 joint income tax filers. The reported itemized charitable giving that year was $491,004,000.

In 1993, 82 percent of giving came from the middle- and low-income class populations, but in 2011, 56.67 percent of giving came from middle- and low-income classes. The rest came from households with incomes of $200,000 and more per year.

Daugherty said the state's aging population also is something he's keeping an eye on to track what the transition of wealth will be from the mature, boomer generation to the members of Generation X as well as Millenials.

Susan Landis, executive director of the Beckley Area Foundation, thinks West Virginia's numbers may be misleading.

"People in West Virginia believe in helping their neighbors, so if there's a flood, a derecho, you do think to help your neighbors, but if they are asked, ‘Have you made a charitable donation in the last three to six months?' they wouldn't count that," she said. "They would think in order to have given a charitable gift, they would have had to have given $1,000 to the Red Cross.

"I also think relatively few people in West Virginia itemize charitable deductions on their federal tax return."

Analyzing giving

After 14 years with the Greater Kanawha Valley Foundation, President and CEO Becky Ceperley has seen a lot of giving cycles.

"When the stock market is good and the economy is good, philanthropy is usually up," she said. 

She said her community foundation had fewer than 10 donor-advised funds 14 years ago, explaining that donor-advised funds allow donors to make recommendations to the foundation about where they'd like their gifts to go.

"Now, we have about 120, 125, so what this is reflective of is the desire for many people to give in their lifetime, particularly younger people, who would rather give now rather than wait until they pass away and leave it in their estate," she said.

Ceperley said her foundation has about 500 separate funds and serves a six-county region, and it's consistently ranked as one of the nation's largest community foundations.

"The valley has been blessed with people who care about this community and want to see it thrive," she said. "Most of our funds are endowed, which means they'll be here forever; you can't spend the principal.

"When they leave a gift, that money will continue to go into the community forever, so there will be resources for education, arts and culture, land use, health and human services and recreation."

She said the state always ranks fairly low among other states in giving, despite the state culture of giving, but part of the problem may be in-state perception.

"I think many people think you have to be very, very wealthy and unless you've got millions of dollars that you can't make contributions or you're not a philanthropist," she said. "I think we need to make it clear that giving at any level makes you a philanthropist, whether it's $10, $10,000 or $10 million, you are a philanthropist and every one of those dollars goes to help build the community, to help individuals who may not be as lucky as the rest of us or to help children who are in need and families who are in need.

"Every single dollar counts, and when we all give together, then we really make an impact."

Tres Ross, executive director of the Ross Foundation in Parkersburg, said his family's foundation has been an extension of what their businesses had been doing in the community.

"We fund education, arts, disabilities, animals, economic development and temporary assistance," he said.

The foundation has focused on the ON TRAC program through Main Street West Virginia to help revitalize the downtown Parkersburg community, and Ross said he has seen an increase in requests for helping the homeless.

Ross has performed a lot of the research to crunch the numbers for West Virginia Grantmakers, and he said West Virginia's smaller size, compared with other states, makes it hard to compare its giving.

"It has increased a lot over the years," he said. "The U.S. has gone up a lot, but not as much in our state, which is just because we're a smaller group.

"I know we've improved … but there are still very limited dollars."

Growing giving

Landis, at the Beckley Area Foundation, said it has taken time for the community to grow the foundation, which started in 1985 with a volunteer board of directors and no staff.

Landis joined the board in 1988, serving as a volunteer for a number of years. She has been the foundation's executive director for the past 18 years.

"I'd first comment that West Virginia struggles with the perception that our communities are too small, population-wise, to support community foundations," she said.

She said the state has proven that wrong, going from three community foundations in 1985 to roughly 30 now, with assets of about $33 million.

Landis said in the past 10 years, her foundation has received a spike in the number of testamentary gifts people leave in their wills.

"We have proven that people can depend on us to fulfill their charitable intent," she said. "The appreciation and the feeling that they can depend upon us has resulted in people including us in their wills, and it takes the passage of time; that's not something that's going to happen when a foundation is first started."

Landis agreed there is a misconception among community members in thinking they need a certain last name to start a foundation.

"People have come to understand that community foundations succeed because we are pooling lots of people's charitable assets," she said. "It doesn't take one person who has charitable assets, but putting all these assets together, we do build a significant base of charitable funds that can then support whatever the community's current needs and opportunities may be."

She said her focus is on her community and telling people there what the foundation is doing and how the public can help.

"And they, in turn, do it," she said.

Daugherty stressed that the philanthropy community can do more than just give financial resources to the nonprofit, public or government sectors. He said expertise and knowledge to identify efficiencies can come from the philanthropic sector as well.

"Also, the philanthropic sector is a convener to bring different players to the table to discuss, in a non-partisan fashion, creating efficiencies, effective programs and models, brokering public-private philanthropic partnerships and creating solutions, just to name a few," Daugherty said. 

His organization provides professional counsel, training and resources to all of the state's grantmaking foundations — everything from the Claude Worthington Benedum Foundation to the smaller community foundations. Grantmakers also encourages collaboration among funders to grow the state's base of philanthropy.

Elaine Wilson, professor of tax law and the law of charities at West Virginia University College of Law, has been teaching in the state for two years. She came here from Indiana. 

She said West Virginia has a "fairly robust" community foundation system, and it encourages philanthropy on a level that doesn't require a person to have a million dollars in the bank, but discussion about federal tax reform has the financial community on alert.

"But most people in West Virginia are giving because they believe in the cause of giving, not because they're getting a tax deduction for it," she said.

Daugherty said about 65 percent of tax filers who itemize their charitable giving in West Virginia are from the middle- to low-income class.

"Reducing or altering the charitable deduction could reduce their ability to give, resulting in many critical charities that respond to the needs of our citizens and communities, during these challenging times, in a precarious position of not having enough revenue to continue their good works," Daugherty said. 

He said his group also is "quietly and confidentially" communicating with state residents who might be seeing new wealth due to Marcellus Shale drilling to take care of their families first, then their businesses or property and to put some money aside and then assess what they may be willing to do for their communities.

"We've got to position ourselves now, for the transfer of wealth to let people know what they can do because if we wait 10 or 12 years, we're going to miss a lot," he said.