Martha Randolph Carr Martha Randolph Carr, 5/11/2009 [Archive]

Charitable Giving Takes It On the Chin

Charitable Giving Takes it On the Chin

By Martha Randolph Carr

It would be swell if charitable giving were completely altruistic. Development directors of non-profit organizations everywhere would see their coffers swell from the good will and cold hard cash. Grant writing would become a thing of the past freeing up a lot of time for more of the mission at hand. But that's not exactly human nature.

It's particularly annoying then, when elected officials use that high bar to justify policy decisions and expect the rest of us to drink the Kool-Aid.

There is a line item in the Obama administration's proposed 2010 budget that calls for a decrease in the deduction for charitable giving by taxpayers earning more than $250,000 per year to 28 percent.

Obama wants to level the playing field and make sure that lower income brackets get the same deduction as the top bracket. His constant refrain has been that if the giving is truly charitable how much someone gets in return shouldn't matter. Hard decisions will have to be made in order to begin to balance the budget and get through these dire times.

Frankly, the fact that the size of the deduction still matters may have a little something to do with why that bracket is financially well off. It's not necessarily warm hearted but it's good financial acumen to first take care of the personal bottom line. And, if the line item is allowed to stay it will add up to a hat trick for a lot of dual-earning families who are already mulling over losses from the stock market and proposed tax hikes and may have college to pay for and a recession reduced nest egg.

Charitable organizations are bracing themselves for another decrease in donations and that's after the Madoff scandal, the stock market tumble, the rise in unemployment and the large increases in the number of people who require charitable services.

According to a 2006 Bank of America study done in conjunction with the Center on Philanthropy at Indiana University on U.S. charitable giving, donors who earn above $200,000 per year represent only 3.1 percent of all households but are responsible for two thirds of all donations. Even when corporations and foundations are added into the mix, this group is responsible for slightly more than half of all donations. That's a lot to lose at a time when local and state governments are already cutting back on help for the poor, the arts, education and other worthwhile and valuable projects.

And in a 2008 update to the study, researchers found that there was a shift in motivation among the top donors away from personal connections playing a part in deciding who would be receiving the largesse and toward accountants, attorneys and financial advisors. In other words, as the economy started to melt down, the wealthy started to be more careful about who they were giving their hard earned money to and became more concerned about what it would mean to their own fortunes.

It's an old saw that large multi-national corporations and the very wealthy in this country aren't paying their fair share of taxes. It's even an argument that has real merit to it but a dose of reality needs to play a part here as well. Rather than create new problems for organizations already being financially strained, create more incentives to give. Shrinking the tax benefit for charitable donations by the well to do won't come close to helping out the trillion dollar deficit but maintaining and perhaps even increasing the benefit could end up making a difference to the quality of life for millions of Americans who couldn't afford it any other way.

If you'd like to get involved in the 2009 America Challenge to raise funds for community-based charities email me at for more information. Together we're going to build stronger communities and empower ourselves.

Martha Randolph Carr's latest book, A Place to Call Home, a memoir about the reemergence of U.S. orphanages is available wherever books are sold. If you'd like Martha to come and speak to your group visit: Email Martha at: or visit

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