See What’s Out There

There was an article in the New York Times yesterday about philanthropic gifts by the very wealthy and whether those gifts were truly deserving of the tax breaks they get.

Here’s the frame of the debate:

The rich are giving more to charity than ever, but people like Mr. Broad are not the only ones footing the bill for such generosity. For every three dollars they give away, the federal government typically gives up a dollar or more in tax revenue, because of the charitable tax deduction and by not collecting estate taxes…

A common perception of philanthropy is that one of its central purposes is to alleviate the suffering of society’s least fortunate and therefore promote greater equality, taking some of the burden off government. In exchange, the United States is one of a handful of countries to allow givers a tax deduction. In essence, the public is letting private individuals decide how to allocate money on their behalf.

What qualifies for that tax deduction has broadened over the 90 years since its creation to include everything from university golf teams to puppet theaters — even an organization established after Hurricane Katrina to help practitioners of sadomasochism obtain gear they had lost in the storm.

Roughly three-quarters of charitable gifts of $50 million and more from 2002 through March 31 went to universities, private foundations, hospitals and art museums, according to the Center on Philanthropy at Indiana University.

Of the rest, the Bill and Melinda Gates Foundation accounted for half on the center’s list.

What you need to know is that “Research shows that less than 10 percent of the money Americans give to charity addresses basic human needs, like sheltering the homeless, feeding the hungry and caring for the indigent sick, and that the wealthiest typically devote an even smaller portion of their giving to such causes than everyone else.”

So the question becomes, is it worth it for taxpayers to be footing the bill?

To sum up the pro-tax-break position:

[The philanthropist and billionaire] Mr. Broad (rhymes with road) says his gifts provide a greater public benefit than if the money goes to taxes for the government to spend. “I believe the public benefit is significantly greater than the tax benefit an individual receives,” Mr. Broad said. “I think there’s a multiplier effect. What smart, entrepreneurial philanthropists and their foundations do is get greater value for how they invest their money than if the government were doing it.”

To sum up the anti-tax-break position:

“When millions of people are dying of AIDS and malaria in Africa, it is hard to justify the umpteenth society gala held for the benefit of a performing arts center or an art museum,” he wrote in his investment commentary this month. “A $30 million gift to a concert hall is not philanthropy, it is a Napoleonic coronation.”

Clearly there is a need for reform:

The charitable deduction cost the government $40 billion in lost tax revenue last year, according to the Joint Committee on Taxation, more than the government spends altogether on managing public lands, protecting the environment and developing new energy sources.

The right answer is probably keeping the deduction but tightening up what can be deducted. For example, arts organization donors might not get deductions for donations that are not to be used for scholarships or education and maybe only 50% for capital expenses. It’s complicated and I wouldn’t expect to see change anytime soon.

MoveOn was one of the pioneers of online organizing. Starting during the Clinton impeachment, MoveOn took off by email and has become one of the largest movers of online activism for progressives.

I get their emails — like I do with many other organizations — so I can see what they’re up to and learn from a variety of techniques about best practices in online advocacy and fundraising. It seems to me that the emails from MoveOn are increasingly including links to video. In fact, I think the video thing is crowding out the older more traditional asks to give money or send a note to Congress.

Here’s the one I got today about the upcoming debate on Iraq:

Some changes at Changing the Present:

Hi Michael,

Would you please help us get the word out to your network of nonprofits and to those who can help us reach others?

Nonprofits can now get a free Enhanced listing on www.ChangingThePresent.org.

For the last two years, we have worked with an accomplished group of nonprofit leaders to develop more effective ways for nonprofits to raise money. That group, our Board of Advisors, includes the heads of over 125 prominent nonprofit organizations, such as Amnesty International, Sierra Club, Sesame Workshop, United States Fund for UNICEF, Rainforest Alliance, Ashoka, Grameen Foundation USA, and the Lance Armstrong Foundation, as well as other social sector leaders, such as Nobel Peace Prize Laureate Jody Williams.

The result of our efforts is a new nonprofit website, www.ChangingThePresent.org, which helps nonprofits raise awareness and money. The site is distinctive in that it allows visitors to choose exactly what they want to accomplish to make the world a better place.

Today’s visitors to the site find donation opportunities from many leading nonprofits. They can preserve an acre of the rainforest, give a child her first book, fund an hour of cancer research, or provide a cataract surgery to restore a blind person’s sight.

We hope that tomorrow’s visitors will also see donation opportunities from your organization.

ChangingThePresent.org also helps nonprofits capture a share of the $250 billion that people in this country now spend each year buying gifts for one another. Donation gifts offer a more meaningful alternative to traditional presents. (After all, how many of us want another pair of fuzzy slippers?) Wish lists and registries ensure the perfect gift. Personalized printed greeting cards include a photo and description of the gift.

ChangingThePresent is remarkably cost-effective. The transaction fee is just 3% and 30 cents, to cover the credit card fee. For nonprofits that sign up now, an Enhanced Listing will be free through the end of the year. A Premium Listing with more gift opportunities will also be discounted.

To learn more: www.changingthepresent.org/nonprofits/for_nonprofits.

I would be glad to discuss this and answer any questions you may have.

Thank you very much.

Very best wishes,

Robert

Robert Tolmach
President
WellGood LLC
200 Park Ave South #1406
New York, NY 10003
tel: 212 972 2368

Bill Clinton is busy these days trying to get back into the White House. But when I saw him speak early this summer at an evening in support of the American Jewish World Service, it was not politics on his mind. Bill Clinton — whatever you think of him — is doing great things for Africa, against HIV/AIDS, on obesity and nutrition, and helping poor communities generally.

He is doing this work in the context of the Clinton Foundation and the Clinton Global Initiative. The Foundation is what it sounds like. The Clinton Global Initiative is a way to get business, NGO and government leaders together and get them to make some promises. For example, Richard Branson’s Virgin Group committed $3 billion to renewable energy projects over the next 10 years.

Clinton knows very well the impact of stories. He knows that to really move people to action, you have to take big scary issues, like HIV/AIDS or health care or malaria, and make it personal. He has always done this well and this is a big part of why he was so persuasive in public office and is so persuasive now with business and government officials around the world.

So I wasn’t surprised to see that Clinton is coming out with a new book. It is called Giving: How Each of Us Can Change the World.

Here’s an excerpt:

I’ve included one picture that says it all. It captures the beautiful face and bright eyes of a Cambodian orphan born with HIV. Basil was ten months old when this photo was taken. His mother died when he was only one month old, and her doctor arranged for him to be taken in by New Hope for Cambodian Children, an organization that cares for HIV-positive orphans and other vulnerable children. When Basil arrived at the home, he was six weeks of age and had both HIV and tuberculosis. His doctor, a Clinton Foundation fellow, treated him for both conditions, giving Basil lifesaving pediatric AIDS medication through my foundation’s partnership with UNITAID, which funds our efforts to treat children across the globe. Basil responded well to the treatment, gained weight, and, as you can see, is now healthy. He has a chance. That’s often all one person can give another. But it can make all the difference.