I found the chapter Religion from the book Nonprofit Nation to be interesting and highly readable yet I’ve chosen to dedicate only a small part of my blog to this topic as I felt that we covered it so extensively in class. I think it’s a sticky situation how religion directly touches far more people than any other part of the U.S. nonprofit sector yet with the separation of church and state religious institutions don’t have to register or file reports with the IRS. While I understand that this agreement keeps the state from having power over churches I would personally appreciate more financial transparency within the largest subsection of nonprofits.
The post titled “Estate Tax and Charitable Giving” off of the blog Philantopic was originally not my favorite but in my second read through I realized how important the authors questions are. Estate Taxes are not something that most people think about daily (maybe I’m just speaking for myself here) and I suppose that is part of how they were lowered so substantially with such little publicity. Though on the surface estate taxes only affect about one half of one percent of Americans, these are the wealthiest people in America and in many cases probably the world. Therefore these taxes affect all of us. The IRS website explains that people paying estate taxes are able to deduct from their gross estate by giving money to “qualified charities”. By lowering the percentage these people have to pay and raising the individual exemption I believe it gives the high upper class less of an incentive to donate to nonprofits. This seems like an odd choice for congress to make in these rough economic times but maybe there’s a master plan that I’m missing here?
Here is a link to the IRS’ definition of an estate tax, which I found to be highly helpful in understanding this reading.
I found the reading titled “Charitable Deductions Under Scrutiny” to initially be incredibly frustrating. Immediately after reading about how congress and the white house lowered Estate Taxes I got to read about Washington’s new ideas to fix our budget deficit; which involve limiting the mortgage-interest deduction, raising the amount of wages that are subject to social security tax and reducing the tax breaks that charitable donors receive. All actions that I believed would directly negatively affect nonprofits and therefore the economic lower class. However, as I went through the entire readying I found myself questioning how fair the current system is and wondering if a better one was possible.
There is an interesting quote half way through the reading where Tim Delaney states, “we shouldn’t be asking whether nonprofits will be hurt by some of these proposals but whether the people we as nonprofits serve would benefit or suffer”. And I really did ask. And my answer? I’m still not sure. As we’ve said in class, people who start nonprofits tend to think with their hearts instead of their heads and it seems to me that hurting nonprofits would eventually hurt the American people in general.
Dan Palotta’s post, “Our Ineffectiveness at Measuring Effectiveness” was probably my favorite reading for this week. I strongly agreed with his point that the measuring and rating of nonprofits is flawed though I must admit that his proposed alternative seems a little unrealistic. People want immediate results and spending hundreds of millions on a nonprofit social network wouldn’t make much sense to a lot of people, probably even to a lot of nonprofits. Something does need to change within this system but in our imperfect word there is always something else that needs funding and in my opinion, individuals who want to donate a lot of money to a cause want a cause that sounds flashier and meets a more widely recognized need.
Tim Harford’s economic blog was also quite interesting. I found the details of John List’s experiments and the three motivations for social giving (altruism, warm-glow, and social pressure) to be fascinating yet it left me wondering what percentage of donators falls into each category. I attempted to do a little follow up research on this question but I'm pretty sure that such a number is currently unknown. Still it's interesting to speculate...
Till next time!
Asia,
ReplyDeleteThanks for your post. I also became frustrated when I read "Charitable Deductions Under Scrutiny." I did agree with the piece on simplifying the current laws but disagree with the timing of it all. There are so many other areas to look at in terms of triming the budget defecit. I think we are adding more problems to a long list of seemingly unsolvable problems.
Hey Asia!
ReplyDeleteI am glad that you posted about Dan Palotta, because I enjoyed that reading as well. I found his proposed method of changing tax break methods to be unrealistic and even a little too difficult to achieve. The nonprofit social network would lead to fewer and fewer people donating, and therefore the government would be expected to unrealistically pick up the excess that was left over.
Asia,
ReplyDeleteI liked that you have an optimistic question about there being a master plan behind the estate tax. However, I feel like there isn't. I think it is just a way for rich people to get more breaks. I also feel that limiting the amounts of charitable tax breaks, raising wage limits on taxing for Social Security etc will hurt those in most need of help. In the current climate I don't see how lower income people are really getting any help for now or the future.