Since yesterday’s post I have “cooled off” just a little bit about the charitable tax deduction debate going on in Congress and at the White House. One of my dearest friends — Fred — emailed me last night suggesting the tone in yesterday’s post might have been a little over the top (and I thank Fred for watching my back). Nevertheless, I am not done blogging about this subject, but I will try to do better with my tone today.
As someone who received his formal education in “urban planning,” I learned at a very early age the meaning of the word “NIMBY“. Of course, it is an acronym that stands for “Not In My BackYard and has been stretched to also include people who advocate a policy position but oppose implementation of it in a manner that would affect them or their cause.
Looking at our nation’s fiscal and budgetary situations, I think almost everyone sees that something needs to be done (e.g. spending cuts, tax increases, closing loopholes, etc). Unfortunately, it seems like everyone wants this done in a way where others will be asked to sacrifice while their budget allocations or special tax breaks or loopholes are preserved.
Isn’t this exactly what fundraising professionals are saying to Congress when they lobby to save the charitable tax deduction?
Additionally, as I said yesterday, we (the resource development community) need to keep this issue in perspective. President Obama and the Congress are not proposing the elimination of the deduction. As I understand it, the proposal is simply to cap the deduction at 28%, which means that only those Americans in the 33% and 35% tax brackets will be affected.
While I see both sides of this debate very clearly (and AFP does make some good points which I agree with regarding wealthier donors and tax implications), I think my biggest objections are three-fold:
- there is far too much rhetoric and very few facts in this debate,
- “Shared” sacrifice is the only our nation will find its way out of this current situation and the non-profit community has more credibility than stooping to NIMBY-like arguments, and
- Shouldn’t AFP focus more time helping non-profits prepare for the inevitable day where government grants and preferential tax loopholes dry up?
I also find myself torn on the issue of “subsidizing” other people’s charitable contributions to their churches and social service non-profits. After all, isn’t that really what is happening when Uncle Sam” offered “Joe Q. Public” a tax deduction on anything?
Regardless of whether the end is near or not, there are things I believe non-profit organizations should start doing today in preparation for what I see as an inevitable decision our politicians will need to make one day. Here are just a few of my ideas:
- Invest time, energy and money in getting better prospect identification and cultivation
- Invest time, energy and money in development and use of an awesome case for support
- Invest time, energy and money in donor stewardship
- Invest time, energy and money in development of outcomes measurement and an impact assessment model
- Double down on board development efforts to recruit new board volunteers with dynamic social networks who are enthusiastic fundraisers
- Invest time, energy and money in marketing efforts (e.g. building a marketing committee, creating online social networks, improving transparency via your website, etc)
Let me leave you with this thought … challenges like this one are NOT new. In fact, they are as old as Aesop’s Fable about “The Ant and the Grasshopper”. Take a few minutes to watch this YouTube video and refresh your memory. After you do so, please take a moment to reflect on these questions: “What should you do to prepare?” and “What can I start doing today to begin preparing?”
I encourage you to share some of your thoughts using the comment box for this blog. We can all learn from each other!
Here is to your health!
Erik Anderson Owner, The Healthy Non-Profit LLC eanderson847@gmail.com http://twitter.com/#!/eanderson847 http://www.facebook.com/eanderson847 http://www.linkedin.com/in/erikanderson847