Philanthropy, Social Justice, and Tax Incentives

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A Failure of Philanthropy American charity shortchanges the poor, and public policy is partly to blame By Rob Reich

Interesting article. It is a reframe for me, since working with a financial advisor, I am used to the government "discount" on giving being a positive thing that helps people give. However, when I came across this statement, the whole thing started to fall apart for me:

A $500 donation by the person in the 35 percent bracket costs the person less than the same donation to the same place by the person in the 10 percent bracket. Because the same social good is ostensibly produced in both cases, the differential treatment appears unjust. If anything, lower-income earners would seem to warrant the larger subsidy and incentive. [20]

[20] The upside-down phenomenon is not specific to the tax deduction for charitable donations, of course. Deductions in general overwhelmingly favor the wealthy. In 1999, 50
percent of all tax deductions were claimed by the wealthiest decile of earners.

Because rewarding the lower-income earners for giving when it is harder for them and de-incentivizing those who can more easily afford it would seem to lead to a grosser disparity! The rich, with less of a carrot on giving, would give less, aka keep more, while the poor/middle class, with more of a carrot on giving, would give more, aka keep less! Does
that logic make sense to you?

I am interested in how we can incentivize giving to social justice. And I get that the article is in opposition to the "Greater Good" argument that philanthropy saves capitalism and democracy. However, I think they should have stuck with the question of: "How do we incentivize giving specifically to social justice through tax law?" That seemed a stronger and more robust case to me.

Peer to Peer

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Catalytic Communities recently celebrated their successful fund-raising drive through the peer to peer network activity of Pledgebank by drawing a lucky winner for a trip for two to Rio. A doctor, Jason Yax, won the trip, and he says he will be taking his brother Justin. Both Jason and Justin focus their attention on infectious disease and international work. Look for future updates from Catalytic Communities on their new blog.

Peer to Peer network activity seems to fit strongly with my values. And there is something in the network analysis information I have read from Valdis Krebs which makes me think there is a clear argument about how peer to peer networks have great strength as opposed to top-down networks which restrict information flow and dis-empower people at all levels. I will be reading more about network analysis, and let you know. For now, check out the network analysis papers Valdis has listed on his site, orgnet.com.