Saturday, February 28, 2009
I Give because I Get
President Obama's recently released budget has generated a lot of angst, even among the nonprofit community. One of the contentious parts of the president's proposal is a cap on charitable tax deductions by the wealthy. Many argue that the limit will reduce the amount of money wealthy people give, thereby shrinking the already shrunken coffers of many NGOs.
If this turns out to be true, could we safely assume that most people only give large sums to charity because they know they'll get it back?
In the Chronicle of Philanthropy, Robert Reich - one of my favorite economists - argues that in the long run, there are trade offs to be made: can a better funded (and reformed) healthcare system better take care of our nation's populace than the nonprofit sector, which relies on the generosity of the wealthy?
He also raises a great point, while I make regular (albeit small) donations to charitable orgs, I am not eligible for deductions because my gifts have never exceeded $5,000. Perhaps our president is simply making equity more of a priority? I'm waiting for Newt Gingrich and Rush Limbaugh to use their socialism cry as a relaunching pad.
Addition: Thanks to one of our readers who sent us this link to the March 2, story in the Wall Street Journal. Would Bill Gates be concerned about getting $700 less on his $10,000 donation?
Picture: U.S. Government Printing Office