Following up on the Benevolence International Foundation in Illinois, which had its assets frozen last December by the Bush administration, the Chicago Tribune finds much suspicious behavior. For example, an orphanage outside Kabul funded by the foundation was until recently “run by a Taliban official who was also a good friend of Osama bin Laden.” The group’s local agent for the orphanage told the Tribune “he picked the location on the recommendation” of a Taliban official named Hafeezullah, who had a reputation for corruption, hosted bin Laden in his home, and sometimes served as Osama’s interpreter. The orphanage’s records show that less than a quarter of the money Benevolence claims to have donated actually reached the orphans. “Government authorities appear to believe ” the foundation’s leader was connected with the “Services Office,” which is “widely viewed as the precursor to Al Qaeda.” The charity’s Saudi Arabian office was shut down several years ago during a Saudi government “crackdown” on terrorism funding.
This nation will witness an unprecedented transfer of wealth—to heirs, government, and charity—over the next 50 years,” writes Boston College professor Paul Schervish in a Boston Globe op-ed. According to an economic model he and a colleague developed, at least $40.6 trillion will change hands from 1998 to 2052—and that’s a very conservative estimate. If one instead assumes that the rate of saving will remain at the usual historical level and that the average real growth of the economy will equal the 3 percent annual average of the past two decades, then the actual transfer of wealth will total $73 trillion. And even that figure refers only to estates at death, ignoring the large gifts to family and charities that occur during Americans’ lifetimes. Combining lifetime philanthropic giving and charitable bequests, Schervish estimates $10 trillion to $25 trillion of personal wealth will go into charities during the 50-year period. After interviews with over 200 high net worth individuals, Schervish concludes “wealth-holders are eager to use their money wisely”; the new philanthropists seek “a new relationship between donors and charities.” They “approach their philanthropy in the same entrepreneurial spirit with which they made their fortunes.”
Beginning with their 2001 returns, Massachusetts taxpayers can deduct charitable contributions for the first time ever, which “could add up to as much as $137.2 million more” in their pockets, says the Boston Globe. Yet despite 72 percent of voters’ approving the deduction on the November 2000 ballot, “there is already a movement afoot at the State House to repeal it.” The chairman of the state House Ways and Means committee has introduced a bill to eliminate the deduction, saying “it’s more a tax write-off for corporations making out-of-state donations than a benefit to individual taxpayers or people in need of services.” But a nonprofit group that provides free tax preparation for low-income people says the deduction will be “a really big deal for our taxpayers,” because even taxpayers who don’t itemize deductions may use the charitable deduction. A prominent CPA, by contrast, says the deduction “hasn’t been a big issue” for richer clients. Economist David Tuerck says his studies show the deduction “helps boost giving, which in turn helps offset lost tax revenues.” A charitable tax break, he says, is a “far more effective way of accomplishing the goals of government.” Concerned about the state’s poor record of individual giving, George McCully of the Massachusetts Catalogue for Philanthropy and other nonprofit leaders are rallying opposition to repeal. (See McCully’s article.)
Kindergartners at Watch-Care Academy,” says the Denver Post, “do things many American adults don’t: read, write, add, subtract, and speak politely.” The private elementary school’s director says it “subsidizes taxpayers by taking kids the public school can’t educate and sending them back as star middle-schoolers,” and so she wants the state legislature “to approve energy executive and philanthropist Alex Cranberg’s idea for a tax credit for donations to private schools.” Last year the legislature turned him down, claiming the measure would hurt public schools. But this year the Colorado House Finance Committee voted 6-5 to pass it on to the Appropriations Committee. “The bill creates educational assistance funds, and to assuage concerns about vouchers—which have been proposed and defeated in Colorado—at least 40 percent of the money raised would go to public school students, for such things as supplies or tutoring. The rest would go for private school scholarships.” Cranberg’s two-year-old Alliance for Choice in Education has awarded $2 million in scholarships; he believes the tax credit “would spur the creation of more scholarship funds.”
Kae Dakin, president of Washington Grantmakers, an organization of 140 capital-area philanthropic groups, tells the Washington Post, “There is an enormous amount of untapped potential” among affluent women. Dakin says women are traditionally more comfortable with volunteering time than with giving money. Lin Macmaster, who has studied wealthy women’s attitudes, agrees: “Women don’t look at themselves as philanthropists.” Ami Aronson, head of Washington’s Bernstein Family Foundation, says “old-school women philanthropists are of a mind-set of being private, of trying to downplay their economic viability and success” or their inherited wealth. One survey found that affluent women “needed more money than men did to feel financially secure about their futures.” But women’s philanthropy is increasing; women’s foundations that raise money “primarily for programs that benefit women and children” have risen in number from five to 95 in the past 20 years. Nor are women philanthropists limited only to “women’s issues” in their work. For example, the Boston Globe tells of Elizabeth Weber, who grew up in the Somerville housing projects of Boston, yearning to get out. “All I knew was I wanted to be a millionaire,” she says. At 44, she’d reached her goal, going “from selling brushes door-to-door to becoming international field president for Market America, earning more than seven figures a year.” What’s next? “You give it all back, or at least a lot of it.” At her twentieth wedding anniversary a year and a half ago, Weber announced the formation of the Weber Foundation of Helping Hands, which has given more than $100,000 to people with “life-threatening illnesses or other catastrophic situations.” They give away “nearly every dime” received because “all of the administrative expenses, which are considerable, have been donated by friends and suppliers or paid for by Weber.”
The St. Louis School Choice Scholarship Fund, which already helps nearly 1,300 poor children in the city attend private school, “will draw in 375 more pupils this fall, thanks to $1.5 million in new donations,” reports the St. Louis Post-Dispatch. The family of retired local businessman Eugene Williams and his wife, Evie, gave the Scholarship Fund $2.6 million two years ago, and the same year a $1 million donation was made by retired May Stores executive David Farrell and his wife, Betty. Now these two families are together donating an additional $500,000. “Another $500,000 is coming from donations made to the Today and Tomorrow Foundation. The remainder is contributed by the national Children’s Scholarship Fund,” a group founded in 1998 by Wall Street financier Theodore Forstmann and Wal-Mart heir John Walton. The group raised $80 million this year to support new scholarships in 18 cities. The scholarships offered in St. Louis will “pay up to $1,500 annually toward tuition for four years, though families with higher incomes receive less assistance.” More than 100 schools in the area “have agreed to accept the scholarships” for middle- and low-income children.
Brandishing old shoes and ‘Wanted’ posters featuring a photo of conservative scholar Robert Rector,” poverty activists stormed the Heritage Foundation where Rector works. The Washington Post reports that when the chanting protesters crowded him against a wall, Rector “asked them specifically, ‘What would you like me to do?’ ‘We’d like you to walk in the shoes of the poor,’ ” they said. Rector replied, “I would be happy to,” and “they seemed very surprised that I would agree to do that.” The protest was organized by the Washington-based Center for Community Change, which also targeted the Democratic Leadership Council and the Department of Health and Human Services for their roles in “the policies that have victimized the poor,” such as the Bush welfare plan. “ ‘Oh my, a fan club,’“ Rector recalled thinking ”as he was surrounded.
Robert Putnam, the gloomy social critic of Bowling Alone fame, makes a case for limited civic optimism in the wake of September 11. The American Prospect says that he and his colleagues conducted a new nationwide survey from mid-October to mid-November that charted civic attitudes and behaviors and found a mixed picture. Still, “the levels of political consciousness and engagement are substantially higher than they were a year ago.” As the year ended, “Americans were more united, readier for collective sacrifice, and more attuned to public purpose than we have been for several decades. Indeed, we have a more capacious sense of ‘we’ than we have had in the adult experience of most Americans now alive.” Putnam believes these findings translate into “a window of opportunity . . . for a sort of civic renewal that occurs only once or twice a century.”
According to National Journal, “Although President Bush hasn’t said much about what businesses can do to promote his national service plan, experts say the corporate sector can play a central role.” Half of all Fortune 500 companies sponsor a volunteer program, most created in the past ten years. For example, when Cisco had to lay off workers, it “offered employees one-third of their salaries, plus health benefits and stock options, to voluntarily leave Cisco and enlist with any one of 29 approved nonprofit groups.” Timberland lets employees have a week a year of paid leave for volunteer work. Ameritech requires managers to do “a minimum of two service activities—formal or informal—for which they receive a grade during their yearly review.”
In Maryland and around the country,” the Baltimore Sun reports, “foundations are addressing a longtime problem few have wanted to talk about—finding organizations that are strong enough to be worthy of major investments. To solve it, they’re opening their pocketbooks to give grants that strengthen groups . . . or to establish the kind of training programs they hope will deepen the skills of nonprofit leaders. “Three Maryland foundations—the Harry and Jeanette Weinberg Foundation, the Morris Goldseker Foundation, and the Marion I. and Henry J. Knott Foundation—are cited as local leaders in efforts to improve the managerial strengths of their grantees. The Sun observes, however, that “in creating such programs, foundations are acknowledging they have been part of the problem. Nonprofit leaders frequently complain that philanthropists often are interested only in funding particular programs, and only for a limited time,” which can lead to neglect of an organization’s management and other overhead.
In 1989, the Los Angeles Times reports, the D.C. Central Kitchen in Washington opened with the dual mission of both feeding the hungry and teaching the homeless how to make cooking a career. “We bring them in and tell them, ‘If you help us feed the city, we’ll get you a good job,’ ” says Robert Egger, whose idea has spread to at least 65 similar efforts in 58 cities. In the Oxnard, California, Rescue Mission, Ruben Rodriguez now prepares the day’s meal, though months before he was standing in the same line looking for food while “strung out on heroin.” He explains, “I love cooking, but I never thought I could make it a profession. I am learning to stand on my own feet as a man.” Each student in the school “also takes part in the mission’s 12-month drug and alcohol recovery program, which is grounded in spirituality.” Only after 30 days in the program may they enter the culinary school.
Pat LaFontaine had a 15-year career in the National Hockey League before concussions cut it short. Now he works with children’s charities. “His book, Companions in Courage,” writes Newsday, “has been a resounding success along with his foundation” of the same name that is building interactive playrooms and electronic communication centers at children’s hospitals. “This year he has associated himself with Microsoft to create the Microsoft Hockey Challenge,” a circuit of games that will benefit the Companions in Courage Foundation. Players will include “former hockey stars, celebrities, members of the NYPD and FDNY hockey teams, and a club team from Microsoft,” as well as former Islanders’ coach Butch Goring.
The IRS is requiring less documentation than usual for donations made after September 11 and before 2002, according to the Associate Press. This will ease burdens on taxpayers and the 262 new nonprofits created after the attacks. Current law requires that a taxpayer being audited supply “contemporaneous” written documentation from a charity for donations of $250 or more. A canceled check is insufficient. Now taxpayers “who made such donations will have until October 15 to either obtain” written proof or “show a good-faith effort,” such as a letter or e-mail sent to the charity, to obtain it. Other regulations remain: “For instance, a qualified appraisal is required for any noncash contribution over $5,000, or over $10,000 for securities that are not traded publicly.” Reasonable expenses for travel to New York or Washington to help a charity with recovery efforts “could also qualify for deductions,” although “there is no deduction for the value of services rendered.” Even “wining and dining people such as potential contributors on behalf of a charity is deductible, but not the taxpayer’s own food and drink. An asset purchased to perform volunteer duties, such as a car, cannot be deducted as long as the taxpayer retains ownership.”
Steve Brill tells Newsweek that limo drivers in lower Manhattan are going to the Red Cross center to receive tax-free disaster relief checks of $5,000 to $10,000, even though the drivers “are still making $700 to $1,000 a week.” They “have only to prove that their company had accounts near the World Trade Center . . . How much they’ve lost is not an issue. ‘Our guidelines,’ says Cheryl Clark, a volunteer from Reno, Nevada, ‘are that we don’t inquire into someone’s financial background . . . [because] we don’t want to make it too hard.’ ” By January’s end, the Red Cross estimated that 2,000 to 3,000 people had been given checks.
