It’s not every day that people argue in favor of being taxed. Thus the “man bites dog” timbre of the news stories surrounding calls from Warren Buffett, William H. Gates Sr., George Soros, and about a hundred other leading plutocrats to keep the estate tax. The group took out an ad in the New York Times saying that the tax was both economically and socially beneficial. Gates argued in an op-ed in the Washington Post that eliminating the tax would “decimate charities” and have dire consequences for the federal budget. He claims that “the debate over whether to repeal the estate tax is fundamentally a debate about what sort of America we want to leave to the generations ahead.” But the comments of Steve Moore, president of the free-market Club for Growth, was typical of the quick and vociferous criticism leveled against the pro-estate tax petition. Moore argues in National Review that some of the signees’ magnanimity in begging to be subjected to the tax is less than meets the eye: The mega-rich, like Buffett and Soros, are adept at finding ways around the tax code and making sure their heirs wind up getting pretty much what the donor intended. It’s the relatively little guys (“ranchers, farmers, and self-starter businessmen and women,” according to Moore) who get dinged by the tax.
Donor List Double-cross
The president of a small community foundation in Chattanooga, Tennessee, “knew something was fishy three months ago when he was suddenly inundated with letters from people all over the country—heartbreaking requests for money to pay medical bills, repair rotting floors, or escape crushing debt.” This foundation, like dozens of others across the country, had been included on a list of charitable donors sold by scam artists to people in need. As the New York Times reports, companies sell lists of mailing addresses for private foundations, promising in their marketing materials that “there are literally hundreds of private foundations that are anxious to donate money by mail to people who have genuine reasons for needing the money. Many foundations are not concerned with what you wish to use the money for as long as it is something legal, and this means that you may obtain the money to pay off bills, go on vacation, meet emergency needs, or to buy anything that you might need.” If you have worked in the philanthropic field for any length of time, you are familiar with the odd, unsolicited requests for money that trickle in from confused-sounding individuals. Now you know where they came from.
A Charitable Daily Double
Jailed criminals and thoroughbred racehorses—it’s not a combination that springs readily to mind. But for one innovative nonprofit, the pairing of the Blackburn Correctional Facility and the Thoroughbred Racehorse Foundation has turned out to be a winning trifecta. According to the Los Angeles Times, “The prison gets a job-training program. The foundation gets free land and free labor. The horses get devoted care.” The foundation works to ensure that the former racehorses are not sent to slaughterhouses, but operates under a tight budget and requires plenty of open space and volunteers. The prison has a surfeit of both and sees tending to the horses and other farm-related activities as a useful training mechanism. The men in the program cherish the opportunity. It gives them “a chance to feel good about themselves.” One of the volunteers, in prison for burglary, says that the chance to work outside at the farm “gives you a sense of purpose. . . . The horses depend on you. You’re making a difference.”
In the wake of the Reverend Jesse Jackson’s admission that he made support payments to the mother of his out-of-wedlock child, the Chicago Sun Times asked: Where does Jackson’s money come from? An adviser to the Rainbow/PUSH Coalition admitted that “[Jackson’s] income has always been kind of mysterious. I think he has many different sources of income. I don’t know which ones are disclosed or not.” The National Legal and Policy Center is determined to spread a little sunshine throughout Jackson’s charitable work. The conservative group has filed a complaint with the Internal Revenue Service against the Citizenship Education Fund, a charity arm of the coalition. According to the Chicago Tribune, “In the 27-page complaint to the IRS commissioner, the watchdog group alleges that the Citizenship Education Fund ‘appears to violate’ financial regulations that govern organizations granted tax-exempt status.”
Paying to Play
Up and coming violinist Robert McDuffie found something he really, really wanted: a 1735 Guarneri del Ges violin known as the Ladenburg, whose list of players, according to the New York Times, “has included the 19th-century virtuosos Nicol Paganini and Ludwig Spohr.” This, he realized, was the instrument that could take his art and his career to the next level. One problem: the price tag was $3.5 million. But McDuffie’s dilemma, increasingly common in the world of high-end classical music, where the cost of top-quality instruments has soared beyond the means of even successful musicians, was solved in an innovative way. McDuffie put together a partnership of “investors” who will each own shares in the violin. He will play it (“rent free,” according to the Times), and when he sells it, the investors stand to make a tidy profit—the Ladenburg has been appreciating at a rate of over 10 percent a year over the past decade or so.
Paying Not to Play
If a snappy acronym can help a charity with name recognition, then CRACK (Children Requiring a Caring Kommunity) should have no problem with publicity. But it turns out that the nonprofit is better known for the controversy that it’s stirred up than for its name. The group pays drug addicts $200 cash (no questions asked how they spend it) in return for taking long-term contraceptives or sterilization, so that drug addicts won’t have children they cannot care for. The group’s poster child, according to the San Francisco Chronicle, is “Zachary, whose mother gave birth to six addicted babies. Zachary required 24-hour care and died after three years, costing taxpayers $4 million.” Another woman who turned to the program reports she has had 15 pregnancies and twelve abortions. Over the past three years, CRACK has paid 355 women and three men not to reproduce. Asked why donors should support CRACK rather than other social service programs that address addiction and poverty, one major contributor to the group countered, cryptically: “You might as well ask us why we don’t man the border at El Paso to keep heroin out of the country.”
Paying to Say
The Jerusalem Post reports that a number of Israeli charities may have inadvertently contributed to an American political tempest by writing testimonials for a man who was among their major donors. According to the Post, the charities were put in that awkward position by the donor’s own foundation: “The Rich Foundation solicited letters from Israeli institutions praising the philanthropy of its American founder, exiled commodities trader Marc Rich, who was pardoned by president Bill Clinton on his last day in office, without informing them that the correspondence would be used as support for his pardon application.”
It must be another sign of our overheated charitable times that two of the biggest gifts in history could come and go with little more than a polite acknowledgement from the national news media. When Ted Turner wanted someone to run the new $250 million nonprofit he’s setting up to stem the proliferation of nuclear weapons, he turned to an old friend, former Georgia Senator Sam Nunn. According to the New York Times, the two men “make an odd couple. Mr. Turner is a media mogul, a philanthropist and, when it comes to politics, a leftist who advocates the abolition of nuclear weapons. Mr. Nunn, by contrast . . . is sober and deliberative, a Democrat but a Southern conservative one.” Nunn explained that despite their differences, he and Turner agree that “there are clear and present dangers that [we] can do something about.” Meanwhile, the University of Colorado announced that it has received the biggest gift ever to an American college. The $250 million donated by high-tech entrepreneur Bill Coleman and his wife Claudia will be used to develop technology to help people with developmental and cognitive disabilities.
The School for Spending
It’s always revealing to see an outsider’s view of American philanthropy, such as the Canadian journalist who is amazed by the existence of “a school for spending where the toughest assignment is doing good with $10,000.” She refers to the philanthropy workshop offered by the Rockefeller Foundation in New York City. The exclusive seminar puts young philanthropists together for a multi-week, multi-city program where they read the history of philanthropy, discuss ideas, and learn to become “agents of social change.” Writing for the National Post, she talks to one of the program’s participants, who explains that “participants discuss current issues, such as the economy and the environment, and meet with the operators of nonprofit organizations.” They also participate in a retreat, which “is about ‘the other,’ myself in relation to the other,” says the program’s director. “We’re asking people to do the kind of grantmaking that really asks them to move out of their world into the world of other races, other classes, and other ethnic groups.”
Helping Them Where They Live
Faith-based charities are much in the news these days, but one large foundation not typically associated with faith-based giving has decided to try its hand—in a big way. The Robert Wood Johnson Foundation has announced that it will greatly expand its “Faith in Action” program. According to the Chicago Tribune, “the nation’s largest health care foundation intends to spend up to $100 million over the next six years to develop 2,000 new interfaith programs to deliver services to the elderly and disabled.” The program will send volunteers into the homes of the elderly and disabled and will ultimately help pave the way for the delivery of health care services that will be necessary when the Baby Boom generation joins the ranks of the elderly. “We’ll see this kind of thing going on in every community in this country,” predicts Paul Jellinek, vice president of the foundation.