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America Questioning the Value of Philanthropy

America Questioning the Value of Philanthropy

by Bill High

Our nation is wrestling with what value we place on private giving and philanthropic institutions. Lawmakers are questioning the tax-exempt status of churches and charities, there are calls for cuts to charitable deductions, and more.

Philanthropists and major foundations are currently advocating for legislative action to accelerate the flow of funds from private foundations and donor advised funds.

On the face of it accelerated giving seems like a good thing. However, in reality it will more quickly drain the charitable resources in donor advised funds and smaller foundations (the vast majority of foundations are smaller, actually). This will leave a small number of powerful players in the philanthropic space who can dictate philanthropic priorities in the coming decades.

Elise Westhoff, president and CEO of Philanthropy Roundtable, responded to this recent initiative in an op-ed published in The Wall Street Journal, “The Left Wants a Philanthropy of the Few,” (available without a WSJ subscription here).

But this trend has been building for a long while. During the most recent presidential campaign, candidates proposed tax policies along these lines. A year ago I read Karl Zinsmeister’s “The War on Philanthropy,” also published in The Wall Street Journal (January 8, 2020). There he notes: “Private giving builds institutions of civil society that provide valuable services, alleviating many pressing public problems.”

Think about it. How many schools, hospitals, libraries, homeless shelters, feeding kitchens have been started and continue to operate through private charity?

Zinsmeister challenges the “progressive editorialists and political candidates” who openly call for “deep cuts to charitable deductions and an end to tax protections for churches and other charities, the taxing down of personal fortunes…”

He notes that charitable giving is not just done by the billionaires club but in fact is done by a broad swath of the American public who still believe in the power of kindness. The average household donates $3,000 per year. Another 77 million citizens volunteer.

I encourage you to read the full article for yourself. (And, if you’re interested, read Austin Detwiler’s excellent follow-up piece on Philanthropy Daily.) But here’s Zinsmeister’s ending quote:

“In America, independent problem solvers pounce on many issues before they even rise to national notice. Privately funded civil society attends to a vast range of problems and threats.  This is a distinguishing threat of the U.S. It will be a tragedy if Americans allow our rich tradition of voluntary action to be smothered.”

So here’s my question: how many of your lives have been affected by a charitable organization—whether a church, a school, a library, an addiction agency? Can you imagine a world without charitable organizations funded by people who care about their community? On the other hand, can you imagine a world where the government is the only sponsor of charities?



Photo by Sam Moqadam on Unsplash

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Published February 12, 2021

Topics: Culture Commentary

Charitable GivingCulture CommentaryNonprofitsTaxes

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