Posts Tagged ‘Rick Cohen’

More on Rick Cohen and the charitable deduction fight

6 May 2009

As I reported the other day, Rick Cohen at the Cohen Report took the NGO trade associations to task for their resistance to – and in some cases outright opposition to –  the Obama administration proposal to help pay for expanded health care by capping charitable deductions at 28% for households earning $250,000 and up:

Though the comments CR [Cohen Report] received here for posting have been uniformly supportive of issues raised in the article, I suspect that the majority of readers is staunchly opposed. Or are we wrong? In at least two forums I’ve been in recently, when I raised generic concerns about the shortcomings of foundation grantmaking, the audiences were pretty much in agreement.  But when this issue was broached, one could feel the change in the rooms.  It as pretty remarkable.  I guess I’d be curious regarding follow-ups about:  (1) the extent of pro and con discussion this proposal is getting versus either strident opposition or, as my article described, public reticence in favor of behind-the-scenes opposition; and (2) how people feel about Brooke’s point that for the very wealthy, the tax incentives is really of little consequence. I’d love to hear feedback from CR readers on these issues and more.

Re the first question: no idea. If anyone out there has thoughts/knowledge on this, would be really interesting in hearing about it.

Re the second question: I’m inclined to agree with Brooke, pretty much. My experience working with wealthy donors is that if it factors in at all the tax deduction plays into the amount they’ll donate but not into the more fundamental decision about giving in the first place.

And that’s for the most part the exception, not the rule: what’s much more important is the value of the pile of assets they’re sitting on, and (just as importantly) their perception of relative wealth at the time the gift is made. The tax deductibility – or in this case, a modest reduction in the amount of that deduction – is a second or even third level factor in a philanthropic decision making process.

I’m not sure about this, but I can imagine one big exception to this, which is when a donor is deciding to set up a donor-advised fund at one of the big firms like Fidelity, or at a communitiy foundation. Only because (and please let me know if I’m completely off base here) this seems to me to be a much more transactional relationship, where the calculus of tax benefits could be seen as a much more important factor. . .

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Rick Cohen takes on the charity biz – again

4 May 2009

Without exception, the best writing on the intertubes these days about the “independent sector” – or whatever you want to call the gaggle of trade associations that claim to speak for the millions of non profits active in the US  – is coming from Rick Cohen at his blog, The Cohen Report. Cohen is the ex-ED of the National Committee for Responsive Philanthropy, so he knows what he’s talking about.

Well, Cohen just posted an absolutely devastating piece detailing how  the big  charity associations – Independent Sector, Council on Foundations, the Association of Small Foundations, the Forum of Regional Associations of Grantmakers, and the rest – have lined up against the Obama administration’s proposal to help fund health care reform by reducing the tax benefits that the top 1 percent of Americans currently receive when they itemize their deductions – including their charitable deductions. Cohen shows how these trade groups have completely failed to look beyond their narrow self-interest to the larger public interest – not to mention to the huge gain that thousands of small NGOs and millions of non profit workers. Here’s his conclusion:

Is the potential loss of a small portion of charitable donations, even if a “small portion” is measured in billions, perhaps $4 billion, maybe even $6  billion, depending on economists’ estimates and models, a price worth paying in order to help finance comprehensive health care reform?  For nonprofits as a whole, the short term savings are clear, the long term benefits undeniable, [and] the nonprofit sector itself is “net winner” from universal health coverage…

You want to know what’s really going on in the non profit biz? Read Cohen.