The Politics of Giving

The Philanthropy Roundtable’s Adam Meyerson talks about the future of charity, power grabs by the IRS, and pressures to create a nonprofit cartel.

Katherine Mangu-Ward from the March 2010 issue

(Page 3 of 3)

Meyerson: We’re seeing an entrepreneurial explosion in philanthropic services and in new kinds of giving. Some of these are for-profit. Some of these are nonprofit. Probably the most important new feature we’re seeing is that business minds, really exceptional business minds, are coming into philanthropy now. Some of them are coming in directly as philanthropists, as living donors, but others are applying business models to philanthropy.

One of the most exciting features that we’re seeing is the growth of intermediary organizations. They receive money from donors and then give it out themselves. Kiva might be a good example of this. We see a great market development across many fields. We’re seeing specialized services in the arts, in international giving. There are left-wing intermediaries. There are libertarian intermediaries. You’re also beginning to see foundations seek money from other donors themselves. In part, this is a reaction to Warren Buffett giving money to Bill Gates.

We’re seeing more information, more giving opportunities, more analytical structures for giving. That’s one reason we’re frightened about efforts to cartelize the industry. We think it’s very important to protect this kind of entrepreneurial creativity.

reason: In many cases, government and philanthropy can be seen as substitutes for each other. They’re often competing to service the same needs, be that the public provision of arts or charity to the poor or a service helping immigrants assimilate. Do you think that rivalry intensifies as government steps into an ever-larger role in these intermediate spaces? Is there a sense that government is pushing charity from some places where it has traditionally been?

Meyerson: We do frequently see a kind of crowding out phenomenon in which donors or philanthropists decide to withdraw from a particular field if government is taking care of it. But we frequently see a contrary development as well, which is that government is not always very good at what it does and so the problems aren’t always solved. For instance, in the field of K–12 education there’s $500 billion of government spending. And yet we’re seeing more and more new philanthropists come into that field pushing ideas of choices and competition and high standards and new models of recruiting and compensating teachers and principals. Even in a field that’s tremendously dominated by government, you see philanthropists coming in to find solutions for problems, such as the education of low-income children, that were not being solved by government.

We see this in the field of medical research as well, which is overwhelmingly dominated by government. Smart philanthropists are finding that they can have an enormous contribution by pursuing alternative hypotheses or doing things that government is not doing.

The arts are an interesting space. We have seen a growth of government funding in the arts in recent decades, but even so one of the distinguishing features of the arts in America is that it’s mostly funded by the market and by private contributions, much more by comparison with Europe. It has probably led to there being greater cultural vitality in the United States now than in many European countries.

reason: Obama made service and volunteerism a centerpiece of his campaign. He has tried to facilitate charitable activity and has spoken of putting public money into charities that work. What do you make of that?

Meyerson: He’s following in a tradition of some of his predecessors, including his immediate predecessor. The rhetoric, at least so far, has been larger than the amount of dollars that they’ve committed. We think there’s a danger in trying to bring the private charitable sector under the control of government. It can be very self-defeating and even suicidal to become too dependent on government money. I think it’s important for philanthropists to develop alternative ways besides government funding of expanding successful private-sector programs. That’s a failure within the philanthropic sector right now: It’s very hard to take a really good program and scale it up. But government funding is not the answer to that.

reason: Why is it so hard to find a successful model and then duplicate it?

Meyerson: It could be that with taxation so high they can’t take it to the next level. Philanthropy has a good track record of providing seed capital for innovative organizations and seeing which ones work. It’s less successful in taking them to scale and providing the serious growth capital for them. It’s a serious problem within philanthropy. You’ve got good capital markets in the for-profit sector. You don’t have the greatest nonprofit capital markets.

reason: What’s on the horizon?

Meyerson: The Philanthropy Roundtable was part of a fairly large coalition that fought off a proposal to cap the charitable tax deduction. There’s not much harmful legislation at the moment, but because of the grandiose spending plans that Congress is considering and because of the fiscal crises in the United States, we have to be constantly vigilant. The possibility of legislation seeking new sources of revenue is always there. They can be slipped into 2,000-page bills in the dead of night. Often there’s just a few days, if that, to read what the conference report has to say. The danger to philanthropy is ever-present in an age of grandiose spending plans that have to be paid for.

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Doc Merlin|2.23.10 @ 7:25AM|#

1. Be careful, the left will try to find any large pool of money and subvert it towards their own ends. Charity tends to be very wealthy, and such is very susceptible to this.

2. The idea that broad tax cuts count as a financing would only be true if all our money really belonged to the state and they were just letting us use it. Something the left is increasingly believing.

Alan Vanneman|2.23.10 @ 7:30AM|#

So why are white people giving money to each other to put on ballets when there are lots of poor black people in America? I don't seem to be able to remember the answer to that question.

BakedPenguin|2.23.10 @ 7:53AM|#

Because it's their fucking money? Feel free to donate all your ballet season ticket money to poor black people, Vanneman. Go nuts.

Fluffy|2.23.10 @ 8:11AM|#

Ballets are the more deserving charity, so the answer is "Because people do the right thing sometimes."

Suki|2.23.10 @ 8:25AM|#

Good Morning reason with coffee coming out of my nose.

Fluffy|2.23.10 @ 8:33AM|#

I'm sure I could find a way to justify that statement, if I was called upon to do so.

I could even do so using pinko-speak:

"Arts groups benefit the whole community, and elevate our shared emotional and spiritual space, while direct payments to individuals benefit only those individuals."

Blah blah blah blah blah.

Suki|2.23.10 @ 8:36AM|#

ed|2.23.10 @ 8:14AM|#

The "poor black people" might be satisfied in knowing that, in spite of ballet, 200 million white Americans are dancing like poor black people.

Almanian|2.23.10 @ 9:24AM|#

Nah, they still dance like white people

Warty|2.23.10 @ 8:43AM|#

Just shut the fuck up, Vanneman.

CS%|2.23.10 @ 11:13AM|#

Why was that question even in an article about tax deductible charitable donations? Last time I checked, I couldn't deduct those donations on my taxes.

|2.23.10 @ 11:27AM|#

Actually maybe try reading? every study out there shows funding for the arts and animals and evironment has dried up, the only charities getting donations are the ones helping people, like feeding them, etc.

Fist of Etiquette|2.23.10 @ 7:47AM|#

The people he wanted to hit with a bigger tax bill are already “paying a little bit more.”

The rub is that they are gifting to organizations of their choosing, and in many cases those chosen charities are not affiliated with someone the president needs to reward for helping him get into office. And except for the tax break, with private sector donations the benefitting group cannot credit the government for their gift.

|2.23.10 @ 11:28AM|#

How dare they help others in a way they see fit, not in accordance with the priorities assigned by our elite dear leader!

Zeb|2.23.10 @ 12:27PM|#

Not only are they already paying more. They are paying a higher percentage of their income.

BakedPenguin|2.23.10 @ 7:51AM|#

A few years ago there was a disturbing set of proposals to actually abolish the little guys. Eliot Spitzer, who was then attorney general in New York, actually proposed that foundations with less than $20 million in assets should not be allowed to exist. One argument he made was that there were too many foundations, and it was hard for the IRS and state attorneys general to monitor and keep track of all of them.

Jesus, Spitzer is a cockroach. I don't say this about many politicians in the free world (Jacqui Smith is the only other one I can think of), but I will actually be happy when that worthless piece of sub-human shit dies.

Nitori Kawashiro|2.23.10 @ 10:18AM|#

"Jesus, Spitzer is a cockroach."

You really hate cockroaches, don't you?

BakedPenguin|2.23.10 @ 10:36AM|#

And I live in Florida, with the disgusting palmetto bugs. For those who don't know, that's a two inch flying cockroach.

cockroach|2.23.10 @ 1:17PM|#

I never slept with a hooker

RichN|2.23.10 @ 8:46AM|#

If there has to be a tax then it should tax the charitable organizations, not the donors.

mr simple|2.23.10 @ 8:53AM|#

That's retarded. There doesn't have to be a tax and taxing charities is stupid and counter-productive.

the tide|2.23.10 @ 1:24PM|#

I am not against taxing charities that fail to spend most of the money on programs. There is nothing charitable about spending more than 25% on administration.

Jason|2.23.10 @ 10:26PM|#

@tide you assume the charity's job is just handing out money. Most of the time there are a lot of meetings, coordination, events, and so forth that go into making charities successful, and those things require planning and overhead.

If a charity is 100% spending on programs, they are essentially doing nothing long-term, just handing out money. Organizations need administration.

the tide|2.23.10 @ 11:12PM|#

I follow http://www.charitywatch.org
Interesting that I could not find the charity linked to you handle. I never said 100% spending on programs but I do feel 75% is the right amount.

mr simple|2.23.10 @ 8:52AM|#

Is any one really surprised that the government is trying to choke out competition? The people in government and their useful idiot friends know that with more people/organizations looking to the government for their subsistence or approval the easier it will be for government to broaden its powers. Charities show that this expanded government is not necessary and is less efficient.

KPres|2.23.10 @ 9:07AM|#

Of course not. Look at what they're doing to Toyota.

John Tagliaferro|2.23.10 @ 9:53AM|#

Back lot of the White House:

We need to reach out to Toyota, but first we need to get their attention. Get all of their planet killing cars off the roads first, then we will offer them a deal.

They speak Toyotan, so find a native to negotiate with them and make sure he looks native for the cameras.

|2.23.10 @ 6:00PM|#

Nonetheless, some prominent legislators have been saying that tax preferences amount to an earmark, a gift from the government.

Given the enthusiasm and dynamism in the nonprofit sector, why aren't those prominent legislators saying that more people should be able to utilize more of their money as those people think best?

You answered my question, mr simple.

Rhywun|2.23.10 @ 9:21AM|#

Spitzer is a cockroach

That's Once and Future NYS Governor Cockroach to you.

BakedPenguin|2.23.10 @ 10:41AM|#

"I'm a fucking steamroller!"

He should get what happened to Kevin Kline.

|2.23.10 @ 9:25AM|#

Giving is always a good thing is it not?

Jess
www.complete-anonymity.cz.tc

|2.23.10 @ 9:30AM|#

Why does Vanneman think black people don't want to go to the ballet?

Do you think they aren't capable of appreciating it, Alan? Or is it just that you don't want "those people" sitting next to you?

John Tagliaferro|2.23.10 @ 10:10AM|#

1) It's because they can't afford it without the government!

2) Black culture is different than racist honkey european motherfucker culture and needs to be equal.

Am I getting the lingo right?

Rhywun|2.23.10 @ 10:05AM|#

I call BS. That's got to be a parody.

RCTL|2.23.10 @ 10:10AM|#

"We see this in the field of medical research as well, which is overwhelmingly dominated by government." I'm bookmarking that one for later.

|2.23.10 @ 10:14AM|#

As usual, a magnificent magnus opus from a tremendous thought leader. However, my view is that we should eliminate the charitable deduction. Given that Reason has been utterly unsuccessful at eliminating excessive senior benefits, we are going to have to find a way to raise taxes in one way or another. In my mind, one okay way to accomplish this is to widen the tax base. I appreciate it when people give money to charity, but I do not think this should debilitate the tax base, thereby raising taxes on other forms of activity and future taxpayers. If people want to give money to their local hospitals and alma matters, by all means do so. But this shouldn't lessen their tax obligations. Starve the Leviathan has been a failure now for three decades. The only way to lower taxes in the long run is to cut spending.

Rhywun|2.23.10 @ 10:30AM|#

Americans do not have to pay federal income taxes on money they hand over to philanthropic organizations

What's remarkable is that some of the 65% of us who don't itemize, and for whom the above sentence is therefore incorrect, give too.

CS%|2.23.10 @ 11:15AM|#

Very true! I've always given, but it does feel a little better now (and I might give a little more too).

Jason|2.23.10 @ 10:27PM|#

Try doing your giving via http://givv.org. It's easy and convenient (and free.)

Barry Loberfeld|2.23.10 @ 12:33PM|#

From here:

Ironically, the widely expressed fear that people won't voluntarily help those who can't help themselves -- the foremost objection to the free market -- is self-refuting. If everyone is concerned about the poor primarily, then what's the problem? Religionists and secularists of virtually all stripes proclaim identical sentiments when it comes to aiding the less fortunate. And yet we have this theater-of-the-absurd chorus with each member wailing that he alone cares about his fellow man.

Pingback| 2.23.10 @ 12:50PM

Political Digest 23 Feb 2010 « The Republican Heretic links to this page. Here’s an excerpt:

…Bennet Races, American Spectator Senate GOP: Dems lack votes to use partisan tactic on health reform, The Hill Obama Destroys Pledge to Allow Americans To Keep Their HC Plans, American Spectator The Politics of Giving, Reason Magazine Categories: Digest Comments (0) Trackbacks (0) Leave a comment Trackback No comments yet. No trackbacks yet. Name (required) E-mail (will not be published) (required) Website Click…

Pingback| 2.23.10 @ 1:34PM

The Crossed Pond » The Politics of Giving links to this page. Here’s an excerpt:

); The Crossed Pond “A nation which can prefer disgrace to danger is prepared for a master, and deserves one.” Posted by Brad @ 2:33 pm on February 23rd 2010 The Politics of Giving Nice interview between Reason and Adam Meyerson, the president of Philanthropy Roundtable, regarding the nonprofit sector’s constant fear of government getting ideas about looking to philanthropic giving as a…

Pingback| 2.23.10 @ 2:09PM

Instapundit » Blog Archive » TRYING TO CREATE a nonprofit cartel?… links to this page. Here’s an excerpt:

…PDA Terms of Use Backup RSS Advertise « I DON’T THINK THIS COUNTS AS PROGRESS: The rise of the point-and-click botnet. “In 2005, a Russian… February 23, 2010 TRYING TO CREATE a nonprofit cartel? Posted at by Glenn Reynolds at 2:09 pm if (WIDGETBOX) WIDGETBOX.renderWidget('c6738f00-977c-48fd-98da-0afe24da2ee8'); Get the Pajamas TV - V2.0 widget and many other great free widgets at Widgetbox!…

Pingback| 2.23.10 @ 2:15PM

Obama Attacks Charitable Giving - Grasscity.com Forums links to this page. Here’s an excerpt:

…Thread Tools Display Modes # 1 ( permalink) Today, 08:15 PM Shade Ghost of Christmas Past Join Date: Apr 2009 Location: Bat Country Posts: 1,328 Obama Attacks Charitable Giving The Politics of Giving The Philanthropy Roundtables Adam Meyerson talks about the future of charity, power grabs by the IRS, and pressures to create a nonprofit cartel. Katherine Mangu-Ward Quote: Americans love to give…

Pingback| 2.23.10 @ 3:53PM

Noya Khobor » Blog Archive » The Politics of Giving – Reason Magazine links to this page. Here’s an excerpt:

…Magazine The Philanthropy Roundtable’s Adam Meyerson talks about the future of charity, power grabs by the IRS, and pressures to create a nonprofit cartel. Originally posted here: The Politics of Giving – Reason Magazine Tags: a-lot-about, a-nonprofit-cartel-, federal-court, future, latest-polls, markets, philanthropy, photos This entry was posted on Tuesday, February 23rd, 2010 at 12:00 pm and is filed…

|2.23.10 @ 10:12PM|#

If Spitzer wanted to hose foundations smaller than $20MM, I can only assume as NY AG he was finding scam foundation after scam foundation. Given that his beat encompassed Wall Street, AKA the world HQ of shady money, this seems likely.

But I admit to being very surprised about that revelation, and give props to Reason for this piece. I'm interested to find out more.

|2.23.10 @ 10:15PM|#

The first three questions were:
reason: What do you say to people who object to the fact that tax-exempt donations are going to the opera or to Harvard when there are genuinely needy people in the world?
reason: Let me put it more bluntly. How would you reply to someone who says, “There are lots of poor black people in America. Why are white people giving money to each other to put on ballets?”
reason: Charities in America get preferential tax status, under the 501(c)3 provision of the Internal Revenue Code. Various players argue that this tax status means charitable organizations are, in some sense, funded with public money.

The basic premise of all three is that all money belongs to the government and we should be grateful that it lets us keep some. FALSE

Jason|2.23.10 @ 10:24PM|#

Check out http://givv.org/recipients?q=liberty

I created because I wanted an easier way to support all the freedom/liberty groups (there are a bunch of good ones).

I think there's a better model for charity than the old "send a check at the end of the year" - it's to send smaller microdonations to lots of charities at once, every month. If we all do that, the transparency, knowledge, and convenience go up while the hassle, privacy violation, and cost go down. Check it out.

|2.23.10 @ 10:39PM|#

One more important consideration is that those who set up foundations have a desire to share with others and sufficient assets to make a difference. You leftists forget that with assets come options. Try to tax away their wealth and they will move, right Arnold? Try to expropriate the assets they have set aside to help others and they will move the assets. If you want to live in a country that believes this way, Cuba is only 90 miles away. Or you could go stay with Komrade Hugo.

|2.23.10 @ 11:15PM|#

No, not everybody who sets up foundations has this goal, you simplistic jackass.

US foundations are a means to bury capital beyond the reach of tax law. That they are commonly used as a structure in philanthropic financial engineering does not magically make every foundation legitimately philanthropic. Not on this planet.

Good luck with your precious bodily fluids.

u r right|2.24.10 @ 1:27AM|#

Simplistic jackass is a little harsh. I don't think people who don't come from money know how the game is played.

|2.24.10 @ 5:25AM|#

Okay, fair enough. I was too harsh.

Then again, I don't come from money either, and you don't find me equating leftism with communism.

What exactly is it about the right-wing POV that favors running one's mouth when one knows jack shit of what they speak?

u r right|2.24.10 @ 11:19AM|#

I don't know but it is stereotypical. I find it interesting to read what libertarians and conservatives have to say.

Pingback| 2.23.10 @ 11:55PM

The Politics of Giving – Reason Magazine | Drakz Free Online Service links to this page. Here’s an excerpt:

…the Philanthropy Roundtable, an association of foundations and other charitable organizations —sent a strongly worded letter to Senate Finance Committee Chairman Max Baucus (D-Mont. More: The Politics of Giving – Reason Magazine Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and…

Pingback| 2.23.10 @ 11:56PM

…no-repeat bottom right;} Home Videos africa directory donations funding nonprofit tax Uncategorized The Politics of Giving – Reason Magazine %excerpt% Excerpt from: The Politics of Giving – Reason Magazine Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and…

Pingback| 2.23.10 @ 11:57PM

…Chairman Max … Comprehensive tax legislation is expected in 2010, and the revised rules may include new requirements for organizations with tax -exempt status Original post: The Politics of Giving – Reason Magazine Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and…

Pingback| 2.23.10 @ 11:58PM

…—sent a strongly worded letter to Senate Finance Committee Chairman Max Baucus (D-Mont.) declaring that “with so many Americans relying on the charitable … Continue reading here: The Politics of Giving – Reason Magazine Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and…

Pingback| 2.23.10 @ 11:59PM

…an association of foundations and other charitable organizations —sent a strongly worded letter to Senate Finance Committee Chairman Max Baucus (D-Mont See the original post here: The Politics of Giving – Reason Magazine Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and…

Pingback| 2.24.10 @ 1:09PM

The Politics of Giving – Reason Magazine links to this page. Here’s an excerpt:

– Reason Magazine The Philanthropy Roundtable’s Adam Meyerson talks about the future of charity, power grabs by the IRS, and pressures to create a nonprofit cartel. Read more: The Politics of Giving – Reason Magazine Related Posts Budget Expert: U.S. Fiscal Crisis 'Endangers our Prosperity and … Althouse: "Politics in Indiana is the old boy's school. They're … Immigration…

Pingback| 2.25.10 @ 9:11AM

The Politics of Giving | Drakz Free Online Service links to this page. Here’s an excerpt:

…they make contributions to genuinely charitable causes, Americans can decide where and how to give away their money voluntarily. We’re talking about voluntary action here. … Excerpt from: The Politics of Giving Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and Other ... ...…

Pingback| 2.25.10 @ 9:12AM

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…The Politics of Giving – Reason Magazine reason: Charities in America get preferential tax status, under the 501(c)3 provision of the Internal Revenue Code. The rest is here: The Politics of Giving – Reason Magazine Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and…

Pingback| 2.25.10 @ 10:35PM

…no-repeat bottom right;} Home Videos africa directory donations funding nonprofit tax Uncategorized The Politics of Giving %excerpt% Read more from the original source: The Politics of Giving Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and Other ... ...…

Pingback| 2.25.10 @ 10:36PM

…the Philanthropy Roundtable, an association of foundations and other charitable organizations —sent a strongly worded letter to Senate Finance Committee Chairman … See the original post: The Politics of Giving Share and Enjoy: Related Articles Bookmarks Tags Nonprofit Groups Failed to Pay $1-Billi... ... Here is the original post: Nonprofit Groups Failed to Pay $1-Billion in Employment and Other ... ...…

louboutinvips|3.29.10 @ 4:36AM|#

Why was that question even in an article about tax deductible charitable donations? Last time I checked, I couldn't deduct those donations on my taxes.
http://www.christianlouboutinvips.com

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