Tag Archives: charitable deductions

The Company They Keep: Tax Tit Deductions, the Right, & Big Whine Charities

New Orleans    So you might ask in all of the hoopla as the USA went over the fiscal cliff, what happened to the charitable deductions that I have written about several times?

Well, there were some modest changes because some ceilings were place on the value of personal exemptions and itemized deductions for high-income tax filers making over $250,000 for individuals and $300,000 for couples.  This in fact was one of the so-called “wins” for the President since he did get some more tax justice by recovering some tax from such families even as many of the Bush-era tax breaks with some tweaks have now become permanent.  According to a chart in the Wall Street Journal the other day, this was extremely important and will yield $150 billion in new revenue to the government over the next 10 years.   These changes for those higher income families affect things like mortgage interest deductions, state tax offsets, and for those who bother to make any, their charitable deductions.

Predictably some of the old Bushies are yelping.  Ari Fleischer, George W’s old press secretary, wrote a crazy convoluted op-ed in the Journal slapping at tax justice and equity in a predictable response.  The embarrassing part of all of this is to read his argument as he peers around the smokescreen is what the right is building out of these minor changes in the charitable deduction allowances.  Fleischer argues that it’s true that people should give to charities out of the “goodness of their heart,” but then also whimpers that now he has less to give and defends his position with quotes from the Chronicle of Philanthropy and the anti-tax justice Charitable Giving Coalition of big time, big whine charities.

The Journal the day before had a similarly confusing statement from Diana Aviv, head of the Independent Sector, which claims to represent foundations (which are really tax shelters for the rich, let’s remember!), nonprofits (the mega-sized ones at least), and other charitable groups (huh?).  She wondered out loud what would happen now to her sugar daddies.  Leading with her mouth rather than her other parts of her noggin, she commented that in light of the increased tax rates on the rich and the caps on deductions for those with high incomes, “The big question for us now is, if we are increasing rates on folks…does the combination create a greater disincentive for people to give?”   A more sober and less self-interested observer, a J.P. Morgan analyst, Michael Feroli, was then quoted by the Journal with a prediction that “the new tax-break limits ‘should not directly affect…giving to charities or taking on more mortgage debt.”


What kind of world are we now working in where Diane Aviv and Ari Fleischer are doing the group hug with big-time, big-whine charities who are – and make no mistake about this – opposing a more equitable tax system?  This is all about their narrow, self-interest and not about the public interest whatsoever!  And, when we have to find comfort and calm from J.P. Morgan while the Cassandras are screaming, we are really going over a cliff.

What are they thinking?  When we have to have more revenue in order to protect the very real survival of critical welfare, health, education, and support systems and entitlements in this country for all our citizens, how can any nonprofit argue that their own programs or mission is more important than the common good?!?  When achieving this also brings more justice and fairer distribution to the United States, which has been moving rapidly towards becoming one of the most economically unequal societies in the world, this is a big win.   The Chronicle of Philanthropy should start writing a cover piece on this failure of nonprofit leadership in these times.

Here is the most bitter irony that we will have to hear and swallow soon.  These same nonprofits and their lobbyists, like Aviv, will soon be whining that they need more money, because government is curtialing services and support for the poor and other impacted groups the charities were claiming to help.  I wonder if any of them will ever realize then that they should have been lobbying for more tax justice in order to protect and expand all of these programs, not just trying to cover their own fat asses and paychecks.            


Shoestring Philanthropists and Charitable Deductions

New Orleans                       Parade magazine is still an insert feature in my hometown paper.  Last Sunday a copy was shoved my way marking a story about a “shoestring philanthropist.”  I like that term.  I’m a huge sucker for these stories, because while billionaires get the features in  big newspapers and magazines, surveys and real analysis regularly reveal that a higher percentage of income is given and more philanthropy is extended from regular citizens and much lower income families helping neighbors, relatives, and strangers with the little they have on a daily basis.  An economist correctly pointed out in a recent piece in the New York Times, that not surprisingly charitable deductions were weighted heavily towards contributions from the rich, rather than benefiting citizens of average income, adding another nail in what I would hope to be the coffin of charitable tax deductions.

So I may like the term “shoestring philanthropist,” but I’m even a bigger fan of the “everyday philanthropist” understanding the value and importance of their contributions to community and cause.  This year I touted a group of friends who came together originally in New York and then elsewhere, including a group of us in New Orleans, to create chapters of the Secret Society of Creative Philanthropy.  In New Orleans we divided up a gift of $1000 (my unexpected royalty check from writing Citizen Wealth which seemed to be destined to seek a way to multiply citizen wealth of course) among a group of organizers, family, and friends to see what people would make happen with $100.  This kind of freelance activity turned out to be harder than you might imagine for many people, because the small sum of money had to be matched by a greater total of work, initiative, and effort to actually make something happen.  It’s not over until it’s over, but people who simply passed the money on during this first year of our chapter, may actually end up multiplying the benefit of the money, more than those that hoped to make the “money work” in a real project.  I don’t think that’s unusual in general, though it is kind of surprising for this highly motivated group.  We’ll see.

The Parade article propped a retired San Francisco teacher named Marc Gold living in a hotel room in Bangkok most of the year on savings and a union pension (not old enough yet for Social Security) who gives away a couple of grand a year of his own and sums raised in coffee klatches with friends and others in the United States.  Another story told of a family on the Virginia coast that gives out about $3000 per year solicited from emails on “philanthropic” travels to Thailand, Panama, and elsewhere.   Some of these small efforts can grow from such seeds to something more serious.  I know of no better example than that of Mary Whelan, the mother of a former ACORN staff member and friend, who started small scale community development projects in Uganda and Kenya from such personal spirit and commitment and constructed a nonprofit (Give Us Wings) that raises more than a $100,000 a year from friends and others in the Twin Cities.

As organizers we scoff at much of this as nothing more than small scale social work applying band aids in a hopeless triage requiring major surgery.  Surely a contribution to ACORN International with a wider scope and impact on tens of thousands creating power and permanent change might arguably be better, but I’m a “lift all boats” guy, too.  The more we start enabling the spirit and commitment of people who give a ten, twenty, or more every month, and connect them to the wider vision of their communities, countries, and the world, the better chance we have that that more will flow to social change and the organizational agents of change, and that a culture of shoestring and grassroots philanthropy will supplant the worship of the rich and the default agenda bias of millionaires, billionaires, and zillionaires often simply siphoning off ill gotten gains.

In this season it seems a good time to celebrate and support the community of small donors and the power of their dollars rather than the big buckaroos and their demands for concessions and press notices.  Let a thousand of these flowers bloom and the harvest be one of plenty.