Writing in The New York Times, Mark Oppenheimer explores the question of anonymity among big donors — what prompts an anonymous gift, and why do some philanthropists purposefully not want to remain anonymous? Why do so many givers ask that stuff be named after them: buildings, rooms, endowed professorships? Judeo-Christian tradition cautions against self-promotion. With charity, the medieval Jewish sage Maimonides wrote, it is best that the giver and receiver not know each other’s identities — in this way, the poor person’s dignity is preserved. (Better than charity, he wrote, is to give a poor person a job.) In the Gospel of Matthew, Jesus teaches that “when you give to the needy, do not announce it with trumpets” but rather “do not let your left hand know what your right hand is doing, so that your giving may be in secret.” Do Mr. Schwarzman, Henry R. Kravis or David H. Koch — to pick three of the country’s most generous, and least anonymous, donors — consider these religious admonitions? They did not respond to this columnist’s calls or e-mails. But plenty of others were willing to speak to the matter. “The goal of all religion is to help you outwit your ego, shoot the sucker between the eyes, get it out of the way,” said Lawrence Kushner, an author and Reform rabbi who for 28 years served Congregation Beth El in Sudbury, Mass. So his congregation did not permit any honors for donors — no plaques, no special thank-yous at the end of the sermon. Nothing. “It cost us about $10,000, $20,000 a month in money we could have otherwise got,” Rabbi Kushner estimated. But there was a big upside, “the awesome experience to look out over the congregation and see this guy who had just given $100,000 sitting next to the guy who I was giving money to from my discretionary fund,” with neither aware of the other’s finances. “The idea was, it’s not about you. If you want it to be about you, there are some wonderful congregations where, for enough money, it can be all about you.” Read more here.
Category: Philanthropy Updates
To what degree does your country respect the freedom to be generous? That's the question examined in a new pilot study from the Center for Global Prosperity at the Hudson Institute. The new research explores the climate of philanthropic freedom in 13 nations. The study (PDF download) uses a variety of metrics — including the ease of creating philanthropic organizations and tax policies that either encourage or discourage individual generosity — to determine the level of restrictions in each country. The Hudson Institute's index of philanthropic freedom puts the Netherlands, the United States, Sweden, Japan, Australia, and Mexico at the top. Turkey, Russia, Egypt, and China round out the bottom. The study concludes: Many of the high scoring nations are also high income countries, reflecting the long history of philanthropy and civil society in these countries. Additionally, some emerging economies scored high also, reflecting an improving environment that is conducive to philanthropy in those nations. For example, South Africa, India, and Mexico have implemented policies that promote a healthy civil society and provide tax deductions for donors. Because this study assesses the barriers to civil society organizations and cross-border flows, countries that have restrictive regulations in these two categories scored lower, despite having relatively large tax incentives for donors. For example, countries such as Egypt and Russia provide tax deductions for donors, but the limitations on registration and operations of [charitable organizations] are restrictive. Furthermore, the barriers to the flow of cross-border foreign funds in both countries are tightly regulated and highly restrictive. The Hudson Institute plans to survey all countries in the future to provide a more complete picture.
Civic literacy in the United States is on the decline. But generous philanthropists are working to reverse that trend, and this article in the spring issue of Philanthropy magazine (published by the Philanthropy Roundtable) shows how: “We can live without learning French or being great in chemistry,” posits James Basker. “But how can you be an American citizen without knowing American history?” Basker, who is the president of the Gilder Lehrman Institute, is hardly new to the field of civic education. He has been in his position for 16 years, overseeing the institute’s initiatives to increase knowledge of American history. But he believes there is a new opportunity now with the recent adoption of the Common Core standards by 46 states. Mind you, the standards themselves say nothing about history. In fact, Basker and others worry that if schools are only tested on literacy and math, then the teaching of history will recede even further. But Gilder Lehrman is adapting to the new standards. It has developed Teaching Literacy through History, for instance, a program that aims to help schools fulfill the standards by using the institute’s extensive collection of original historical documents to develop students’ critical thinking and analytical skills. To learn more about the Pope Foundation's support for similar education efforts, click here.
Writing in Forbes, the Manhattan Institute's Howard Husock raises concerns about a component of President Obama's proposed budget that would narrow tax deductions for charitable giving: President Obama’s long-awaited budget proposal, to be released today, does not come right out and say that intends to reduce contributions to charity—but that is almost certainly what would happen were it to become law. Here’s why. The White House has effectively doubled down on a tax change it has been pushing for four years that would limit the value of the charitable tax deduction. The Administration has, since 2009, pushed unsuccessfully to allow only 28 cents on a dollar donated to charity to be deducted—even though the top tax rate for the wealthy donors who make most use of the deduction has been 35 percent. In the budget released today, the President again proposes to cap the charitable deduction at 28 percent—despite the fact that the top rate on the highest earners has increased to 39.6 percent. Think of it this way: the White House proposal would raise the cost of giving to charity from 60 cents per dollar to 72 cents per dollar. That’s a 20 percent increase in what can be called the “charity tax.” When one taxes something more, of course, one gets less of it—and it’s likely that the current $168 billion in itemized charitable giving would decline. Indeed, Indiana University’s Center for Philanthropy has previously estimated that capping the charitable tax deduction’s value at 28 percent—even when the top income tax rate was 35 percent—would lower giving by 1.3 percent, or some $2.18 billion in 2010. The new proposal would likely take an even bigger bite from giving. The Chronicle of Philanthropy reports that the reduction in giving could be as high as $9 billion a year. Later in the column, Husock argues that the charitable deduction is different in several important ways from other deductions, such as the home mortgage deduction. He also posits that, without the charitable deduction, big government will increasingly fill the space once occupied by private philanthropy (emphasis added): Although [the charitable deduction] decreases the tax liability of the affluent, it provides no direct personal benefit that’s the equivalent of a McMansion or gold-plated local schools or parks. It’s true that it leaves more money in taxpayers’ pockets to spend as they wish—but that’s only because of the social benefits their donation is providing, whether in the form of a food pantry or medical research. Indeed, without saying so explicitly, the Obama charity tax increase implicitly assumes, under cover of “fairness,” that Washington will do a better job spending the money than private donors will. But by encouraging philanthropy, we encourage imagination and innovation—in ways the political process, more likely to be constrained by conventional wisdom, will not.
The Philanthropy Roundtable — a nonprofit based out of Washington, D.C., that seeks to foster excellence in the world of philanthropy — highlights the life of North Carolina businessman James B. Duke in this article: James Buchanan Duke built two massive fortunes, the first in tobacco and the second in hydroelectric generation. With his wealth, he became one of the greatest philanthropists in the history of the Carolinas, perhaps best known today as the patron of Duke University. Born in December 1856 near Durham, North Carolina, Duke grew up on a small farm with a widowed father. After the Civil War devastated the Carolina countryside, the Duke family began growing, curing, and selling tobacco. In 1874, the Dukes opened a tobacco factory in Durham, where they were among the first cigarette manufacturers in the South. The family was—at J. B.’s recommendation—among the very first to adopt machine production on a large scale.
WRAL.com's Mark Binker has a lengthy piece discussing nonprofits in North Carolina that contribute ideas to the public policy debate. Binker highlights the Pope Foundation as the principal funding source for right-of-center groups and the Z. Smith Reynolds Foundation as the principal source for left-of-center groups. He writes: Roughly a dozen groups make up the core of Raleigh's intellectual industrial complex, with a dozen others playing a larger or smaller role as specific issues arise. Although there are exceptions, the most frequently quoted and cited of these groups break down into two families, each with ties to one of two foundations that helps to fund their activities. The Justice Center, Action NC, Progress North Carolina, Planned Parenthood and many other left-of-center groups can trace some part of their funding back to the Z. Smith Reynolds Foundation, a Winston-Salem based philanthropy founded as a memorial to the son of a tobacco magnate. A handful of other funders also help bankroll liberal-leaning organizations. Among them is the A.J. Fletcher Foundation, named for the man who founded WRAL-TV and the foundation. His grandson, Jim Goodmon, is both president of WRAL parent Capitol Broadcasting Company and chairman of the foundation's board. However, despite the influence of A.J. Fletcher Foundation and other funders, Z. Smith Reynolds appears to provide the broadest common denominator for Raleigh's family of liberal groups. On the Pope Foundation, Binker writes: The other family, of more conservative public policy groups, is tied together by the John William Pope Foundation. As with the liberal side of the equation, there are other big donors who work with a similar subset of groups to Pope, including businessman Bob [Luddy] and the E.A. Morris Charitable Foundation, but Pope retains the broadest reach. Art Pope, son of the foundation's namesake and McCrory's budget director, is chairman of the foundation. Its allied groups have been much reviled by groups on the political left for years. Much as conservatives say Z Smith Reynolds is funding a network that attacks their political leadership, the Pope foundation is seen as one of the bigger cogs in the Republican message machine. Over the years, Pope has dismissed that criticism. A summary of the foundation's mission says that it supports a network of organizations in North Carolina that "advocate for free markets, limited government, individual responsibility and government transparency." The foundation also supports national groups, including the Heartland Institute, which regularly offers policy experts to reporters covering government stories, and the Federalist Society, a network of conservative lawyers whose North Carolina chapters hold judicial candidate and issue forums. "Generally, there isn’t a requirement that a national public policy group be involved in North Carolina," said Dave Riggs, vice president of operations and programs at the Pope Foundation. "However, we often support national public policy groups that can provide education resources within the state." Riggs, who answered questions via email, did not shy away from the fact that many of the Pope-funded groups are explicitly seen as politically conservative or libertarian. "For the public policy groups that we support, yes, those labels are fair," he said. "We unapologetically support many conservative and libertarian public policy nonprofits, as well as other groups that don’t have an explicit right or left philosophical basis to their education effort." WRAL.com also has a database of profiles on public-policy nonprofits funded by either the Pope or Reynolds foundations.
Have conservatives, preoccupied with the worthy goal of limiting the size of government, lost sight of an equally important goal: strengthening civil society by directly helping low-income individuals? William Schambra explores that question in this piece re-printed in Philanthropy Daily: Conservatives ... argue for a smaller federal government. They do so because it would sustain not only a more vigorous marketplace but also a more robust civil society. Civil society, not government, is the best instrument to meet the needs of low-income people, in this view. For poverty all too often results from the breakdown of the critical civic institutions like family, neighborhood, and voluntary associations that shelter and nurture the most vulnerable among us. When big government begins to assume that function, conservatives argue, it only further erodes civil society, while doing a woefully inadequate job as a substitute. But if this argument is valid, then conservative philanthropy should accompany its opposition to big government with a massive commitment to big civil society. That is, it should devote itself first and foremost to supporting and strengthening the nonprofit organizations that serve low-income people. Yet conservatives frequently forget their responsibility for nurturing civil society. Another argument for smaller government -- that it will liberate the energies of entrepreneurial individuals within the marketplace, thereby producing greater wealth -- tends instead to dominate conservative discourse. That argument brings with it a formidable array of allies: wealthy individuals and corporations and their libertarian-leaning think tanks, journals, and activist nonprofits. Civil society tends to disappear from the libertarian perspective, because once government is reduced, the marketplace can take care of the rest. There is no intermediate layer between oppressive state and free individual. So philanthropy, in this view, needn’t be wasted on civil society. Rather, it should be devoted entirely to winning the intellectual and political battle for smaller government and freer markets by supporting activist nonprofits deeply engaged in electoral warfare. This was the brand of conservatism fully on display in the 2012 election. No wonder a majority of the voters felt that conservatism cared only about the wealthy and not the vulnerable. In the end, Schambra writes that conservative philanthropists have all-too-often lost site of the poor, instead focusing exclusively on the battle over public policy. But to achieve a robust civil society, private investments through humanitarian nonprofits should be given strong consideration. So what about liberal progressives? Schambra has plenty of criticism for them, too. He accuses them of supporting a bloated federal bureaucracy that doesn't meet the needs of the poor, instead spending most of its resources on "wealthy elderly Americans, powerful labor unions, well-paid government employees, and other distinctly non-poor constituencies that have powerful vested interests in federal and state spending." He writes: Government today is big and getting ever bigger not because we’re spending more to meet the needs of the poorest among us. Rather, our bulging domestic budgets are increasingly devoted to Social Security and Medicare for the swelling ranks of the elderly, many of whom are by no means poor; to interest on a rapidly growing public debt; and to massive retirement and health-care benefits for government employees.