Wednesday, February 27, 2013


In the current political climate the greatest uncertainty before philanthropy is whether the charitable deduction will be preserved with no, or very limited, change. Overlooked  in the discussion is that total US philanthropic through-put has hovered at just above or just below 2% of GDP, year in, year  out since for as long as Giving USA has been charting  philanthropic trends.

Increased giving at the top – the $100 million plus cohort, profiled in last week’s Chronicle of Philanthropy, impressive as it is, doesn’t move the needle and a large number of small gifts at the middle and bottom of the pyramid can’t nudge it either. In my view this has a lot less to do with the status of the tax deduction and much more to do with what we actually count.

Even if we allow that a lot of giving is undetected and unreported – e.g. corporate cause related gifts, small cash gifts, internet and  mobile giving, estates too small to file returns, gifts to religion outside the mainstream churches and synagogues …  etc. – what’s not counted at all is the value of voluntarism to the whole process. I have seen a few attempts over the years to quantify volunteer time (not the deductible cost of being a volunteer such as travel and other expenses) but it’s not what one could or would describe as hard science.

Voluntarism is an (uncounted) economic activity; GDP is an expression of economic activity.  I can think of three other ideas that might move the needle: first increase taxes  on the 1% for sure – but raise (not cap) the charitable tax deduction; second limit the  life of private foundations to 50 years and distribute the assets directly or to community foundations for distribution not perpetual storage. Third – as  my friend Ram Capoor  notes philanthropy is highly fractionated. There is no central, searchable go-to web-based source of  information for all stakeholders: donors, organizations, governments, the public – a Trip Advisor for philanthropy. This is a simple,  brilliant idea. Information is currency.

But most important count voluntarism.