Philanthropy v. Taxation

According to a new ranking of charitable giving, as measured by the percentage of a family’s liquid assets given away, Nebraska is the nation’s most charitable state. This ranking doesn’t include Warren Buffet’s huge donation to the Gates Foundation; Nebraskans give one percent of their assets each year to charity.

This list is an attempt by the group New Tithing to get wealthy Americans to start thinking about donations as a share of their assets, rather than a slice of their yearly income. The New York Times piece points out that this effort, if focused correctly, could begin to ameliorate the increasingly sharp divide between rich and poor in our country. As an example of this possibility, the article profiles the efforts of Ord, Nebraska in stabilizing their population and growing new-fangled businesses as a result of charitable funding.

The article also points out that wealthy states like New York fall much further down the line in charitable giving as a percentage of one’s assets–and then speculates on the benefits that would accrue if the affluent areas gave away their money at a rate similar to Nebraskans.

One fact that the article mentions as a possible reason for the lack of charitable giving is the larger tax bills paid by residents of wealthier states. An exchange in the Walsh/Maffei forum the other night emphasizes how ingrained this notion of unfair taxation runs in our state. Both politicians referenced the fact that New York contributes more in taxes than it receives in government benefits, confident that advocating for a lessening of that gap would be a positive way to attract New York voters.

Why don’t voters look at taxation in a similar light as charitable donations? Shouldn’t New York, a much wealthier state than most, contribute a greater share towards the common good? Aren’t taxes spent on the common good? This is perhaps the nub of the problem–call it compulsory v. voluntary philanthropy.

I obviously feel better about my charitable giving if I can control exactly where it goes. Unfortunately, purely voluntary philanthropy runs the risk of creating extremely well-funded operas and Ivy League colleges while leaving thruway interchanges and sewer pipes woefully underfunded. So governments institute compulsory philanthropy, so assets may be distributed more equitably and according to real needs.

The compulsory nature of taxation clouds the beneficial nature of its results: schools, roads, food safety inspection etc. Tax dollars are often spent on efforts many people find objectionable (be they Iraq wars or abortion clinics), further severing the connection in the taxpayers’ mind between their contribution and the public good.

We seem to have created an understanding and a framework for holding charities responsible for the use of our donations. As citizens, we need to demand a similarly transparent and efficient system for collecting, allocating and spending taxpayer dollars. Limited overhead, practical goals, demonstrable results.

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One thought on “Philanthropy v. Taxation

  1. Robert

    You mention in your interesting article that you feel better if you can control where it (your money) goes. You are certainly right, and it is not always clear where goes the donation mde for different projects.

    I would like to mention here that there is a new non-profit NGO called DonationPixel, whith the goal to collect money only via Internet. They have different humanitarian projects around the world.

    This website offers the visibility of the donor – this could be interesting for many companies – the choice of the project and the country, and also the visibility of the work done in the field. They also give answers to different questions, like “Where goes my money?” or “what do they do with it?”.

    It seems to be an interesting new approach to encourage donations for vulnerablesin poor countries. The URL is

    http://www.donationpixel.org/index.php

    Maybe a new way to attract more donation.

    Thanks for your attention.

    Robert

    Like

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