Tuesday, March 17, 2009

Where Does the Philanthropic Sector Fit into the New Order?

We generally try to steer clear of politics but do want to make sure that you are keeping up with one of the latest government proposals that might be a sign of more things to come - hopefully not. While the new administration in Washington is expected to increase government funds flowing to certain nonprofit sectors and encourage involvement in community service, recent suggestions to curb the tax deductibility of charitable contributions for the wealthy raises new questions.

My hope was that a life of community organizing and advocacy for underserved and under-resourced populations by our new president would translate into an equal emphasis on promoting philanthropy for all.

I was surprised to find that with an income of $207,000 - $270,000 in the years before President Obama’s books were published, reported donations never exceeded $3400 or about 0.5-1.5% of income. As his income jumped to $1mil/yr, charitable giving increased to the 5-6% range.

I’m sure we could argue that the wealthy give too little to basic needs and too much to organizations that are already well-endowed, but what is this really saying? Should we view that the philanthropic sector is not a critical complement to the business and government sectors but rather exists to work as a government contractor?

If you are a subscriber to the Chronicle of Philanthropy, be sure to read Leslie Lenkowsky’s commentary – “Government Activism vs. Private Charity: What's Best?” www.philanthropy.com (sorry I can’t provide a direct link to the full article)

Read more about this tax changes potential impact on charitable giving from the IU Center on Philanthropy.

If you want to see presidential tax returns, visit.

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