Charitable tax deduction: What price for love?
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At the megarich level, giving is now starting at a younger age, according to a survey of the top 50 donors by The Chronicle of Philanthropy. More of these billionaires prefer local causes and not to have their names attached to a cause or institution that receives their money. Others are now giving to institutions hit by state budget cuts.
Philanthropy evangelists Bill Gates and Warren Buffett continue to round up the super-rich to make a pledge to give away more than half of their wealth before they die. So far, 102 billionaires have signed up with about a dozen non-Americans recently joining.
One of the more interesting trends in giving is among the young wealthy. A survey of 310 people ages 21 to 40 with inherited wealth finds they are giving money away differently than previous generations. They reject “checkbook philanthropy” for a more engaged style. They are more attuned to their personal values, consulting their peers more on ways to give, and more accepting of risk in their giving.
“They see themselves as focused on impact, first and foremost,” states the survey done by the Johnson Center for Philanthropy and 21/64, a nonprofit consulting practice. “These generations of major donors have the potential to become the most significant philanthropists in history.”
If Congress and President Obama try to whittle back the tax benefits for giving, they need to do so smartly, based on real-world knowledge of this huge and complex phenomenon in American society. Charity comes from the heart, but it can be expressed in new and different ways. Tax policy to encourage that cannot succumb to the politics of the moment.