Charitable Deduction Reforms


charityHouston          Yesterday in talking with Brian Johns, the organizing director of Virginia Organizing on “Wade’s World” on KABF  about his forthcoming article with Ellen Ryan for Social Policy called “Leadership Development is Not a Deliverable,” we were trying to follow the curiously circuitous paths of private philanthropy as it moves from grants supporting community organizing’s mission of empowerment to limited contracts directing specific work,   A calamitous evolution, we thought.

All of which made it impossible not to read closely an op-ed in the Times by Ray Madoff, a professor at Boston College’s Law School.

He made several inarguable points:

  1. Tax deductions for charitable giving by the rich and others taxpayers making enough money to make it worthwhile to itemize deductions is essentially cost to the government of $40 billion in lost tax revenues.

  2. Numerous nonprofit hospitals with tax exemptions provide less charitable care than for profit hospitals and are indistinguishable from big for profit corporations.  Senator Grassley (R-Iowa) thinks they should have to provide more charitable care.   Who can disagree?

  3. Conservation easements are being abused by big time developers to subsidize their developments.

  4. Too many donor advised funds have become vehicles for parking money to escape taxation for an unlimited period of time.   The professor suggests a cap of seven (7) years which doesn’t seem unreasonable.

  5. There hasn’t been a Congressional review of charitable deductions since 1969.

It’s hard to argue that the rich, hospitals, and developers should at least have to work for billions of dollars’ worth of benefits, rather than have the rest of us subsidize them.   Then maybe if we can make it matter, we can also make sure some of the real donations go to make real change.