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| How Jewish Giving is Different |
| Charities' response to the Obama tax proposal: "Just say no" is not good enough. |
| From academe: cut those tax breaks -- except for mine. |
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Three research papers prepared at the University of Indiana Center on Philanthropy find that Jewish giving is different. Below are a few conclusions drawn from these papers that I thought might interest you. Click to see the paper in which the following conclusions were found "Mormons and Jews donate at a level that is several times that of most other groups" " Although belonging to a religion is not a significant factor in giving to the ‘needy’, Jews are slightly more likely to give money to these organizations." "Jews, however, have the highest point estimates for donations to ‘combination’ or umbrella organizations...These results are not surprising, considering that the ‘combination’ groups include...the United Jewish Appeal. "Jews give more money to the needy, to education institutions, to health organizations, and to ‘other’ causes" "Jews are the only group that is price inelastic with respect to donations to ‘All’ organizations" [In other words, Jewish giving does not respond much to charity tax benefits.] "The only religion that is not highly correlated with volunteering is Jewish." [Being Jewish doesn't help predict whether someone will be a volunteer] Click to see the paper in which the following conclusion was found "The fraction of charitable giving that is contributed to religion is generally increasing with conservatism of denomination (Mormons, 91%; Evangelical Protestants, 82%; Mainline Protestants, 62%; Catholics, 51%; other, 50%; Jewish, 40%; none, 40%)." Click to see the paper in which the following conclusion was found "Religious affiliation is not associated with significantly higher secular giving in a robust manner across specifications (with the possible exception of Jews)" |
The president's proposal cuts the tax benefit for charitable giving. President Obama wants to pay the cost of reforming the health care system by increasing taxes rather than adding to the exploding national debt. Among his proosals, Obama wants to increase revenues by cutting the tax benefit of itemized deductions for those earning over $250,000 a year. Instead of reducing their taxes by about 35% of the amount of itemized deductions, they would be able to cut their taxes by only 28%. Among itemized deductions, of course, are contributions to some nonprofit organizations. Most charities oppose the proposal Most, but not all, nonprofits that took a position opposed to the porposal. And many major Jewish organizations came out publicly against. The American Jewish Committee, the Orthodox Union, the Jewish Council for Public Affairs, and United Jewish Communities seemed particularly to be out front on the issue. Why the opposition? The question charities should be asking themselves is whether their opposition is aimed at protecting the needy or at protecting their own institutions. The rapidity with which many slammed the proposal was unfortunate. Before they took any position, I would have prefered to see a nuanced cost-benefit analysis by the nonprofits themselves to assess whether the needy would be better off with or without the tax change and the reformed health care package. Such an asessment would not have been easy or exact. But it would have led to some interesting questions. Some issues to consider Here are some issues nonprofits might have considered before taking a position. (1) How crucial is the passage of the president's tax proposal to ultimately enacting the health care package? (2) Would access to the reformed health care system be of greater benefit to society than the services that would be lost as a result of reduced private donations? (3) How would the tax program affect the total amount of funds available for the needy? The nonprofit lobby claims that charities would lose nearly $5 billion in donations if the program were enacted. Other estimates put the loss in donations closer to $2 billion. But whatever the lost revenue is, it should be compared to the additional revenue going to improved health care. I calculate that the government would gain about $7 billion in tax revenues if the tax program were enacted. That would be a net gain of several billion to help the needy. And that estimate relates just to additional tax from the charitable deduction. The estimate would be far larger if I included the additional tax revenue on the basis of other itemized deductions. A more constructive response Short of embracing the Obama tax proposal, the nonprofit sector could have developed a more constructive response than "just say no". There is a way to raise more revenue for the government while minimizing the negative impact on charitable contributions. Treat the charitable deduction like the deduction for health care costs. Allow charitable gifts to be itemized only to the extent they exceed a floor based on the taxpayer's income. That would still allow generous donors to deduct 35 cents or more for every incremental dollar they donate. Economists have shown that a floor on the charitable tax deduction is more "efficient" than a cap on the rate at which contributions are deducted from taxes. "Efficient" in this context means more dollars raised in taxes per dollar lost in charitable contributions. |
Peter Singer wrote an opinion piece in the Jewish Daily Forward in which he takes pot shots at the charitable deduction for contrabutions to religious organizations, museums, art galleries, theaters, performing arts organizations, and private elementary schools. He apparently has no problem with contributions to universities which are not discussed in the article. Did I mention that Professor Singer teaches at Princeton University? I wrote the following letter to the Forward To the Editor: In "When Charity Isn't Charitable," [Forward May 1] Peter Singer could have made a more honest case with regard to the problems with tax deductibility for contributions and he could have proposed a more practical solution. Singer writes eloquently that the tax system benefits the wealthy by allowing tax deductible contributions to museums, art galleries, theaters and performing arts organizations. "Let's face it" he writes "most of the patrons of these cultural institutions earn more than the median American income." How much more credible would the professor from Princeton have been had he started by looking at his own house. Don't most Princeton students' families earn more than the median American income? Does Princeton, with a multi-billion dollar endowment, need tax deductible contributions? Professor Singer's proposed solution to the problem is wholly unworkable. He wants to allow tax deductibility "only where there is a broad consensus that an organization is serving a valuable public purpose." How is such a "broad consensus" to be determined? By whom? Using what standards? At what moment? Even if it were possible to discover a broad consensus, I'll bet Professor Singer would be unhappy with the results. Ninety percent of all Americans make under $100,000 a year and 60% of their contributions go to religious institutions. A lot of Americans are voting with their pocketbooks that religion is a "valuable public purpose." Would Professor Singer, who opposes the deductibility of contributions to religious organizations, be happy relying on that broad consensus? Something should be done to rationalize the whole system of itemized deductions including those relating to contributions. But Professor Singer's approach is not the way. Ira Kaminow President www.Just-Tzedakah.org |
