A Stanford expert on philanthropy argues that tax-deductible American charity is actually a government subsidy and that philanthropy is not ‘redistributive’ enough. Acton’s Karen Woods points out (obvious to most) that helping the needy is not the exclusive domain of the state. “The real problem with government ‘charity’ is that government takes a ‘one size fits all’ approach to the problem of poverty,” Woods writes.
With a gracious spirit, let’s say that [url=http://thomas.loc.gov/cgi-bin/query/F?c109:1:./temp/~c109UcVNaR:e173273:]Section 317[/url] of [url=http://thomas.loc.gov/cgi-bin/query/D?c109:1:./temp/~c109UcVNaR::]Senate Tax Relief Act of 2005[/url] was penned with the intent of fostering honest accountability in the charity world. And, furthermore, let’s graciously allow that the legislation was designed to send the message that the Internal Revenue Service is vigilantly watching over the donation of tax-deductible clothing and household goods.
A [url=http://www.washingtonpost.com/wp-dyn/content/article/2005/12/29/AR2005122901503.html]recent article[/url] in the Washington Post justifiably underscored the importance of providing goods to charities that actually have value. Too much of what is given to charities today winds up in the local dump.
But Congress was not thinking clearly when it included a “Limitation of Deduction for Charitable Contributions of Clothing and Household Items” in Section 317. This measure requires the Secretary of the Treasury to annually create a list that places ‘market values’ on all household goods or items that would potentially be donated to a charitable organization. For a contribution in excess of $250, the donor would be required to secure a receipt from the charity that provided an itemized list “of number of items contributed, an indication of the condition of each item, a description of the type of item contributed, and a copy of the Secretary’s valuation list or an instruction on how to obtain such list.”
If the donated item is not in a “good used condition or better,” the charity would then need to value the contribution at 20 percent of the market value as deemed by the Secretary’s list. Or no value at all if the charity said it was worthless to the organization.
The [url=http://www.cpjustice.org/cprf]Coalition to Preserve Religious Freedom[/url] argues that Section 317 generates serious operations and accounting burdens for rescue missions and small nonprofit organizations. That is a polite response.
For more than two years now, the IRS has been telling Congress — and the Senate Finance Committee in particular — that it doesn’t have the resources to get its charity oversight work done. Now the IRS wants to get into the clothing and household goods valuation business?
Maybe the Beltway crowd has missed the private sector solution to this issue — one that you can simply order onlilne. The [url=http://www.amazon.com/gp/product/0970323077/qid=1136406966/sr=8-1/ref=pd_bbs_1/002-5327901-0168046?n=507846&s=books&v=glance]2005 It’s Deductible Workbook[/url] is now significantly discounted, but even last week, you could get a copy online for $14.95. Called the “Blue Book for Donated Items,” this private sector product is fully compliant with IRS code.
So, first of all, we should all agree that the IRS doesn’t need to “reinvent the in-kind donation pricing wheel.”
What’s more, we need to ask why the responsibility for finding the value (whatever the source) of donated in-kind goods is put on the receiver of the goods instead of the giver.
Section 317 has the potential to create a classic “unintended consequences” scenario. It may result in the government spending millions of tax dollars to generate information that already exists in the private sector, which by the way, is based on market values. Then the agency that receives the donation has to go through the red tape of providing an itemized list, value, and condition report for each item. That should go a long way toward further burdening and possibly eliminating scores of smaller charities, thrift shops, and rescue missions — groups that are already stretched by the basic tasks of receiving, sorting, and selling donated goods.
Is this all by design? Officials in Washington have been quoted as saying that there are too many small charities in this country. That means, to their way of thinking, that these charities are too difficult to regulate. If the true intent of charity regulation reform is greater accountability for all, let’s find a better way. Section 317 is neither the effective nor efficient way to accomplish this objective.
From a perspective that encompasses the broader, related cultural, economic, and moral issues, Eric Cohen and Leon Kass write in Commentary the most thoughtful and thought-provoking piece I’ve read on the matter of intergenerational responsibility and end-of-life care.
Credit to Stanley Kurtz at The Corner.
Sometimes one man’s trash is just trash. “Most people have no clue what’s involved with taking a garbage bag of stuff and getting it to the person who needs it,” said Lindy Garnette, executive director for SERVE Inc., a Manassas-based nonprofit that operates a 60-bed homeless shelter and food bank.
According to this story, “Eager for Treasure, Not Trash: Charities Sort Through Piles of Donated Goods, Some of Which They Can’t Use,” by Michael Alison Chandler in The Washington Post, these are some of the items donated this holiday season: 20-year-old golf clubs, old Victoria’s Secret Valentine’s Day gifts, six-year-old computers, beta VCRs, broken toys, puzzles without all the pieces and unmatched shoes.
“Many of these gifts end up in the trash, or they are given to yet another charity — one with more storage space — such as the Salvation Army, which has its own dump trucks and daily pickups scheduled to haul away the unsellable stuff from its stores.
After all the sorting, cleaning, storing and transporting, gifts sometimes end up being more trouble than they are worth for strapped nonprofits, which have limited staff and resources.”
For more on how to give effectively so that nonprofits can function efficiently, check out Acton’s Impact World Hunger campaign. A huge part of what we do here is connecting the good intentions of charity and compassion with thoughtful economic understanding.
My little home town of Seminole, Oklahoma, has been scorched by the wildfires sweeping through parts of Oklahoma and Texas. My mother’s beloved horse riding trails in the rural area around Seminole are either smoldering or threatened. I talked to an old high school friend about our response to the disaster. He said, “Karen, we paid attention after those hurricanes. We’re not looking to the government for help. The churches and people all around here have been helping since the fires started. People who had little to begin with, including insurance, have lost everything, even their kids’ Christmas.”
Why does it take such tragedies – fires, floods, hurricanes – to generate a wake up call for people to reach out to needy neighbors? The cultural shift toward “government professionals” taking primary care of society’s problems began 75 years ago, but surely this past year has made at least a figurative believer of the most adamant agnostic: Faith-based organizations meet even catastrophic needs more efficiently and effectively than government agencies or their bureaucratic charity look-alikes.
Subsidiarity – local people meeting individual and community needs in a manner that is direct, personal, and accountable – is more than just a “high falutin’ word” (as my mother often reminds me). Common sense by any other name is still common sense.
How many of us wait for a natural disaster before we’ll actively respond to need? If civil society truly is rooted in the belief that each person is created in God’s image and therefore has worth and dignity, then why is such a natural outreach to neighbors (across the fence and across town) not part of our daily lives?
In Oklahoma, churches that don’t normally house food banks and clothing stores have been collecting these things to help people who have been burned out. But local assistance, as with the Gulf hurricanes, needs to be broader. One group of churchgoers in Texas sat in folding chairs next to their burned out church for Sunday services, a reminder that that people are the church, not the building. The broader faith community is the most effective model of subsidiarity. And that’s a good high falutin’ word for a principle that is simple and true.