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I can tell about two very worthwhile non-profits whose operations I have witnessed from the inside and to which I have donated more than negligible amounts of money. (By "more than negligible amounts" I mean from the standpoint of a retired high school teacher, not from the standpoint of a Bill Gates or a Donald Trump).
The first is the Los Angeles Master Chorale. I am a subscriber (my donation is on top of the cost of the subscription tickets) so I attend all their concerts in Walt Disney Concert Hall in Los Angeles. The group creates transcendent beauty for humanity - the value of that cannot be calculated in dollars. I have visited their school outreach program twice in two different schools. To have trained professional singers of the highest calibre working with kids as young as elementary school is a fantastic thing to see. And in addition the one school I visited was in a poor area. I know several members of the paid staff personally and they are a classy bunch of people.
The second non-profit is the _____________(name of city) Educational Foundation. I did not insert the city name because I have chosen not to identify myself on City-Data. This foundation is designed to support the public schools of that particular school district. They are in a legal position to accept tax-deductible contributions, whereas the school district is not. They fund all sorts of programs in the schools, they give teachers grants for projects and further education, they run an excellent enrichment summer school in which I teach myself. Parents pay tuition, but not the full cost, and there are many scholarships for families who cannot afford the full tuition rate (which is actually a subsidized rate). I have come to know almost all the paid employees of the Foundation personally, and they are a fantastic group of people, dedicated to their mission.
Obviously not all charitable foundations are created equal. I would be leary of supporting any religious organization. But I think it's important to let individuals choose what they want to support, as stated by other posters above. Not everyone would choose (as I have chosen) to support classical choral music and the school system of a particular medium-sized city. But my testimony is about what I know personally, from the inside. I cannot be more pleased with where my money is going.
What a ridiculous analogy. People give freely to their denomination of choice. But when the government begins deciding which non-profit serves a valid purpose and which does not, it's authoritarian.
That's how fascism begins, by the way. When people start stripping others of rights to fulfill what they think is the greater good.
I don't know how you get from "others shouldn't have to pay the real estate taxes, services and other support for these groups" to "rights", but I don't think I want to know!
No one is stopping you from leaving 100% of your estate to a church. In fact, you can take out insurance policies and leave it to your church....
I am just as offended by many of the PACs which have tax-deductible status. It's a slippery slope.
Wait - aren't "conservatives" supposed to be arguing for less in government handouts? Why not have the local church live off the dues just like the rifle club? Or the tennis club? Are you suggesting that praying has been measured to be better than tennis?
I've seen too many abuses of the system....say in the beachfront homes of the church pastor surrounded by priceless amounts of silver and antiques..watched well known charities buy dozens of laptops for their staff and charge them off to "programs" by exaggerating the "count" of how many people they helped.
Give to the orgs of your choice - but to tell me you are doing do while making me pay more for the military, FEMA, the FAA, etc. seems ridiculous.
If it didn't exist already we'd laugh at this joke.....
Oh, down here in Florida, Goodwill has become a amazingly large organization that does.....well, almost nothing except buy lots of prime real estate and take stuff in. If someone did a real study of who was actually helped.....it would be embarrassing.
I'm thankfull that the govt does intercede and sets up parameters to meet the 501.c category. Heck when some of these fly by night non profits sprout up to supposedly help a cause.. it's a sure sign they are the smash and grab type. The feds are cracking down on. Ones targeting vet causes or natural disasters... Seems there are some folks taking advantage of this system...
And nope, I refuse to put change in a bucket to help a cause... Instead I get their address...Research and then decide if they are legitimate.
I want that tax credit, I cringe when I see folks just fork over money to mcd's...You do realize they get the tax credit for your donation? You are just making it easier on them to say "they" donated millions.....It was you that created that...For them to reap the reward ..
It appears from reading this thread that everyone believes not-for-profit organizations depend on donations to operate. Not so. I'm somewhat familiar with one that was established for developmentally disabled people. The guy who started it invested (donated? loaned?) his own money to get it started, but from there on it was run just as a for-profit business would be. His organization cared for hundreds of people who needed care... just as long as they, their families or the state would pay the price. No profits were paid to the owner/shareholder except for a salary -- a VERY, VERY healthy salary.
I'd say he (owner/manager) was "taking advantage" of the system, but I have no real problem with it. He did (I assume) pay income tax on his salary, as did all of his employees (again I assume), and he provided a much-needed service. I can't see that he hurt any of us, but calling it a non-profit is a little misleading.
Well, here's the big problem with your thesis. It has the unspoken presumption that some body, read government, should assess which non-profits are deserving and which are not. That means that the government gets to decide priorities, not the consumer who voluntarily gives his or her money.
I mean, I'm on the board of both a musical organization for youth and a homeless shelter. They are utterly different in terms of objectives and operations. But both do their job effectively and, for the most part, on a shoe string. Who are you, or anyone else for that matter, to tell me that they serve their purpose? As long as nobody is skimming money to pay for Learjets or enormous mansions, it's simply not the government's business. Or yours.
Actually, I want it to be the Government's business, and you hit on the reason. Because there are way too many of these organization's where the leader of said organization is flying learjets and in the enormous mansion. When people donate to these things, they have very little idea as to how the money is being used. Your musical organization I assume is local, as well as your homeless shelter, and may be legit, but too many of these not-for-profits are a scam.
The issue is, if people are donating their hard-earned money, and the organizations are not going to pay taxes on it like everyone else does for the betterment of the people or things the money is intended for, there better be a very excellent reason as to why taxes are not being paid. This is especially needed in this day and age when ethics and morality is at an extreme low.
While I certainly have issues w/ Govt. in many areas, I still want some central entity to tell me if an organization is legit or not.
I have quite a few anecdotes, and I'll some general thoughts here to rebalance:
Foisting something onto the Federal Government has its drawbacks as well. I had a good friend who is much older and was a consultant for FEMA. If the Feds legally obligate themselves to protect against certain things, there are many catastrophe profiteers out there that can't wait to be the only one in position to supply the Federal Government.
Also, getting the declaration wanted can be slow and become political. Locally, a town here asked for disaster relief to fix a $1.2M culvert. Meanwhile, things like the response to New Orleans appear to argue that centralized decision making on this may not be the best response time, and the Feds were outperformed by charities such as the Red Cross. Beyond emergencies, I recall a couple townships that, having stepped outside of their core functions to help utilize block grants to make certain improvements, had worked with groups who were to repay loans from free cash flows, and the target companies made it so they would never be repaid.
Further, remember that a not-for-profit is an entity, not necessarily an organization. If enough money is involved, it would be easy enough to make a specific not-for-profit look fantastic, and channeling other spend through entities that are in some manner controlled by the same people. As there is no voting power or equity, the Boards of these entities are generally chosen, at least in part, by the people they are supposed to supervise. That's a natural conflict of interest, but one that could be corrected.
I also wanted to add that eliminating an exclusion of churches would truly be against the core of this country. If you recall your history, what were the Pilgrims, Quaker etc., but outcast whacky religions England was happy to have someplace to send. The area was truly founded on separation of church and state. At the same time, there are lines to be drawn. I've done the taxes for one relgious group that lived in religious colonies. These colonies were dictated by their religion which provided for all living expenses of the community and received all income. Thus, if the combined income of the community, less all expenses (down to shoes, food etc.) was less than the standard deduction, they could file one return and be done. Otherwise each person had to file a return with their share from an unofficial partnership. Given our fee was flat, you can imagine they never were above.
The Not-For-Profit envelope can be used to fit many entities. Hospitals spring to mind. If you think of many of the licensing associations, many are quite profitable. I recall the audit of one that tried to prepay all of their vendors and expense them to try and bring down the "profitability" of their organization. Additionally, they acquired pieces of artwork and tried to depreciate them. On the other hand, organizations such as Second Harvest and certain Catholic charities have done an amazing job of segregating labor costs keeping administrative costs low, by taking advantage of the administration expertise essentially borrowed from other programs.
Not-For-Profit groups are sadly often targeted for fraudulent activities. Cash donations are always susceptible to theft. Money flows from one person to another without expectation of anything in return are easy to embezzle. There's also the danger of a group promoting an entire activity under the guise of a charity when they, in fact, have no association with the charity. For a time I did forensic auditing, so my viewpoint on low compliance charities is forever skewed, but the charities you work with should have controls, not because they will take it, but because there are white collar thieves that target these organizations.
Finally, and I know this is long, it is dangerous to help people. People in need can be desperate, and desperate people will do what they need to do. So it does make sense for there to be a buffer in many cases. I recall a methadone clinic where we would keep constant track of each other. There are millions of people that are helped by these organizations where nobody else would have an interest in doing so. A ways back there is an old man that picks up litter every day and walks for miles to do so. He sells the recyclables and donates it to charity. It allows him to contribute in a manner where he would truly be unlikely to be able to do so in another way.
What I like about the last guy, is he probably does not itemize his deductions, and thus receives truly no benefit in this world. There's likely not enough of those individuals to make up $340B in annual contributions though. Indeed, much is probably raised at very nice galas or advertised events, that have significant expense that consumes much of the proceeds for Fundraising Co., and the net becomes the contribution to 5013c.
It's an American invention, Not-For-Profits. On the whole, are they worthwhile? I don't know, that's why I ask. There are great ones, and there are terrible ones. I've seen both.
Another point to ponder, and not necessarily answer specifically, and I'll be quiet a bit:
Would you donate to your causes if they were not tax deductible? What if you did not receive acknowledgement in this world, or worse yet, as noted earlier, some other organization took credit for your contribution?
Would greater government control merely outsource an issue for people? Would it stop attracting talent to the cause and instead attract people for the benefits? After the glamour has left, would the government abandon efforts to subsidize the ever needy, such as in public universities, the VA and mental health hospitals?
Is a fraudulent CEO that pilfers funds, yet still inevitably doing something that is good, making the country better off and we should turn a blind eye? Is there a threshold on this?
Without not-for-profits to pillage would white collar criminals instead turn to the elderly, or do they learn their trade and steal from the elderly anyway?
I found humor in Warren Buffet's pledge to donate his money to the only man richer than him in the world. There's some base humor in that on its face, but it does make sense. Bill has no reason to steal, he has more money than he needs already, and the couple is committed, hopefully for the right reasons.
Personally, I'm thinking of what to do. I see two paths. One is charitable giving, the other is to fund a start-up venture. The venture has the promise of creating good jobs for average people and can go much further in helping people in ways that aren't deemed charitable. The surprise will be flipping it into an ESOP when I am too weak to run the company any longer...making the employees the owners. Perhaps a good boost to the middle class would be the best move.
The not-for-profit could feed a few people for a bit, but teaches nobody how to fish. Yet it can feed the people who won't be fed otherwise. Possibly reach those that are not reachable by any other measure. But I'm not good at this. I'd hate to start something that in turn becomes a needy undying entity that is constantly fundraising to continue on. When the funds are gone, the entity should stop, but where does that leave those dependent upon the services.
The not-for-profit could feed a few people for a bit, but teaches nobody how to fish. Yet it can feed the people who won't be fed otherwise. Possibly reach those that are not reachable by any other measure. But I'm not good at this. I'd hate to start something that in turn becomes a needy undying entity that is constantly fundraising to continue on. When the funds are gone, the entity should stop, but where does that leave those dependent upon the services.
The simple answer.
We need to teach people to fish.
Some people cannot be taught to fish and must be fed.
The beauty of places like the Red Cross and Doctors without Borders, etc. is that they have little to do with dependency. Rather they fill the gap.
If there was any scrutiny by the federal government toward frivolous non-profits then Goodwill would not exist. A 10 year old on a Washington DC field trip could tell you that there IS not a single charitable act taking place on Goodwill property. Only thievery, exploitation of the disabled, and at best, below living-wage jobs. How the government lets this scam thrive is a mystery to me.
The second worst non-profit is the NFL, but at least some of their employees are paid well.
As long as government neglects to address not only basic needs (food and shelter for the homeless, for examples), the arts, foreign aid (entire gov't agencies serving the rest of the world were permanently crossed off the federal budget in the 90's) and other important realms of life, non-profits will be necessary. And what do you mean, that the jobs created by non-profits may not offer the worker "their full value"? What does that even mean? It sounds like you're grasping at straws to justify your agenda of eliminating the tax deduction for charitable giving.
If the government (or a certain political party ) is so desperate for tax income that it's considering this, they can eliminate some of the Bush tax cuts, so that those who actually can afford to pay taxes would pay their fair share. It's really a no-brainer. The fact that someone's even considering eliminating this deduction means that tax cuts to high earners have starved the government of funds. Pony up your own share before you start nickeling and diming charity.
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) is so desperate for tax income that it's considering this, they can eliminate some of the Bush tax cuts, so that those who actually can afford to pay taxes would pay their fair share. It's really a no-brainer. The fact that someone's even considering eliminating this deduction means that tax cuts to high earners have starved the government of funds. Pony up your own share before you start nickeling and diming charity.
