- The Washington Times
Thursday, April 20, 2017

ANALYSIS/OPINION:

President Donald Trump’s senior advisers, deep in the weeds of tax reform, are reportedly looking at ways to save the middle class by placing more financial responsibilities on the shoulders of the wealthy — and part of the plan being discussed is to limit the level of deductions charitable organizations can take.

This is the wrong way to go.


If we want a country where the government is subservient to the people — where the free market leads and the federal, state and local public sector classes follow — then charity is key. Put it this way: The more charity, the less government.

The more the private and nonprofit sectors provide, the less necessary government becomes.

Example? If charities provide disaster assistance, the Federal Emergency Management Agency doesn’t need as big of budget.

If the private and nonprofit sectors provide food for hungry families, the Supplemental Nutrition Assistance Program — which exploded under Barack Obama — is not so necessary.

The more churches, nonprofits, individuals and private entities can do, the more government becomes obsolete.

Charity, in other words, keeps us free.

On top of that, charitable organizations are much more responsive to the needs of the individual than government.

If your house burns down, who’s going to help quicker — the American Red Cross? Habitat for Humanity or another nonprofit housing development group? Your local church?

Or — the federal Department of Housing and Urban Development?

When New Orleans was buried in flood waters, how long did it take for then-President George W. Bush to unleash the FEMA funding — to even visit the scene and survey the damage? He was roundly criticized for his slow response. And rightly so. But truly, we shouldn’t be relying on government to save us from disasters in the first place. First off, it rarely works out well. And second off, Americans are a giving bunch. A better system is for the government to stand back, get out of the way, and allow the giving to go forth. That includes providing a tax structure that allows for unfettered giving.

As Philanthropy.com wrote in 2015: ‘Nonprofits in New Orleans had a 131-percent increase in total revenue from 2000 to 2012. During that same period, revenue for nonprofits throughout Louisiana rose 80 percent. Nationwide, the increase was 55 percent.”

Why?

All due to Hurricane Katrina, and the needs of New Orleans prompting the heartfelt giving of individuals and aid groups. And that giving has only prompted more giving.

“Moved by memories of rising floodwaters that ravaged their homes more than a decade ago, New Orleans-area officials and residents rushed [in August 2016] to help victims of the monsoon-like rains that have inundated other parts of Louisiana in recent days, leaving six people dead and thousands temporarily homeless,” the Advocate wrote, in mid-2016.

Area agencies — including “parish agencies, churches and nonprofits,” the Advocate reported — rushed to raise money and supplies for the victims.

And that’s just New Orleans.

Total giving by Americans to charity organizations has risen from about $165 billion in 1975 to more than $373 billion in 2015 — each year.

Foundation giving, meanwhile, increased by 6.5 percent from 2014 to just over $57 billion in 2015. That’s according to the National Philanthropic Trust.

And the giving is distributed among a wide variety of recipients.

“In 2015, the majority of charitable dollars went to religion (32 percent), education (15 percent), human services (12 percent), grant-making foundations (11 percent) and health (8 percent),” the NPT noted.

Moreover, it’s not only the wealthy who give.

While more than 98 percent of so-dubbed “high net worth households” give to charity, according to NPT statistics, the middle class and poor aren’t exactly sitting on the sidelines.

This, from the Chronicle of Philanthropy, from January 2015: “As the recession lifted, poor and middle class Americans dug deeper into their wallets to give to charity, even though they were earning less. At the same time … wealthy Americans earned more, but the portion of the income they gave to charity declined.”

On average, Americans shell out about 3 percent of their income to charity, and have for decades, the Chronicle of Philanthropy found.

But the wealthiest have held back a bit in recent times.

Look at this, from the same news outlet: “The wealthiest Americans — those who earned $200,000 or more — reduced the share of income they gave to charity by 4.6 percent from 2006 to 2012. Meanwhile, Americans who earned less than $100,000 chipped in 4.5 percent more of their income during the same time period. Middle- and lower-income Americans increased the share of income they donated to charity, even as they earned less, on average, than they did six years earlier.”

Limiting the number of tax deductions charities can take means fewer deductions the individual can take. And that could very well translate into less giving. The result? The needs don’t dry and disappear. So who steps in to fill the void?

Government. With all its sticks and carrots, stipulations — and penchant for raising taxes.

A senior aide in the Senate told The Hill that limits on charitable giving is indeed being considered by Treasury Secretary Steven Mnuchin and other administration advisers — that it’s definitely “within the realm of possibility.”

But this is the wrong direction to take with tax reform. Our national freedoms — not to mention our country’s moral compass — depend on a shackle-free giving process. The more we give, the less relevant government becomes. The less relevant government is, the more it shrinks. And that’s just a natural recipe for freedom, right there.

Cheryl Chumley’s second book, “The Devil in DC: Winning Back the Country From the Beast in Washington,” includes more on the link between giving and freedom in her chapter, “Charity Keeps Us Free.”


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