by Putnam Barber pbarber@tess.org
The American system of philanthropy suffers two great weaknesses: It is hard to describe and easy to mock. Its great strength--with roots that go back to the Bill of Rights and its guarantees of freedom of religion and of association--is that it allows divergent visions to express themselves as people's compassion and enthusiasm may direct.
So it is disturbing to hear reiterated from time to time--often in the midst of political debates--fundamentally mistaken notions of philanthropy.
One wrong-headed idea is that charitable contributions "reduce the burdens of government." That viewpoint has crept into political discussions largely as a result of a much-noticed Pennsylvania statute that allowed hard-pressed local governments to challenge tax exemptions granted to non-profit institutions on the ground that their activities didn't help to cut local taxes.
But that view puts the focus in exactly the wrong place: on the things the government does itself, rather than on the things the community does for its members to make a civilized, caring, and fulfilling life possible. The strength and value of the more civic-minded policy embedded in the Internal Revenue Code is that it welcomes and encourages many visions of the public good.
A complementary point of view asserts that favorable tax treatment should be focused on "true charity"--that is, on non-governmental programs directed toward the immediate needs of the poor. Variants of such schemes would limit tax deductions for other purposes, or give additional benefits to taxpayers who donated to qualifying organizations.
Even the best intentioned of such schemes undermine the valuable idea of governmental neutrality with respect to individual philanthropy. The worst of them, of course, are thinly veiled attacks on the idea of government welfare benefits or the legitimacy of public-policy advocacy as an avenue for correcting the inequities and injustices that shadow our communities.
It's no wonder that such pinched visions of philanthropy excite "I got mine" ideologues and anti-tax zealots. But anyone who works in philanthropy--either by encouraging contributions or by organizing the institutions that deliver benefits of all sorts to America's communities--should resist those visions strenuously. In particular, charity leaders should dig in their heels and pull the other way whenever they're offered a chance to disparage the work of colleagues in other fields of non-profit activity. Division of that sort may offer the appearance of advantage, but it erodes the principle of openness in the encouragement of generosity.
Even more disturbing among the many mistaken notions of philanthropy is the oft-repeated canard that granting tax deductions for charitable contributions represents a "subsidy" by other taxpayers to donors' favored activities.
"Why should working stiffs subsidize the opera," critics will snort, "just because some blue blood wants to make a social splash by tossing a few disposable dollars on stage?"
It's an understandable (if mistaken) sort of grumpiness when expressed by naive holders of deep "me first" convictions. It's a promising tactical challenge when advanced by principled opponents of the use of the tax code to encourage various sorts of favored economic activities. But it's balderdash whenever it turns up in discussions or debates about the recognition given to philanthropic behavior in the tax code.
Traditionally (and wisely), America has considered a broad range of activities to fall within the scope of the charitable deduction, including those undertaken by religious and educational organizations. The upshot has been to let donors, not government officials, decide what sorts of things tug at their heartstrings or excite their passion for building a better community.
The range of activities that qualify for tax deductions is not all that different from the range of things that governments undertake using tax revenues--with the chief exceptions, of course, of religious activities and national defense. But unlike government spending decisions, which depend on the political process, charitable organizations depend for their survival on their ability to excite participation and inspire compassion. Both governmental and non-profit activities contribute to the common good, but they do so in fundamentally different ways.
The tax revenue sacrificed as a result of donors' deductions represents a remarkable bargain when compared with what it would cost to "buy" the same addition to the public well-being using government funds directly. The $100 I contribute to a charitable cause reduces tax revenues by, at the maximum, $36, but it delivers $100 (or more) in benefits to the community at large--at least 277 per cent of the benefit that might have been achieved if the government used that forgone $36 in tax revenue for the same cause.
Seeing the strength and value of America's open and diverse philanthropic practices is more than just a fiscal calculation, however. Preserving America's mixed system of providing for the common good reflects a continuing belief in the values of our Constitution. It also leaves room for unexpected forms of creative generosity to bloom at any time.
Every city in America has local treasures that could never pass political muster--nor should they have to. We are all richer for the ones we have today--and for the ones we'll have tomorrow.
Putnam Barber is president of The
Evergreen State Society in Seattle
and a
regular contributor to these pages. The society operates the Information
for Nonprofits World-Wide Web site at
http://www.nonprofit-info.org.