This week's post, I will talk about churches and charity giving during recessions. In the book reading, the focus was about religion in nonprofits. Religion is the largest part of this sector and there are about 375,000 organization. I am not surprised at this number because of the various churches around my community and how religious groups started so early in the United States history. I believe that church and state should be separate but at the same time I think churches should need to file IRS for statistic purposes. Government need to document certain statistics to help a community and asset the needs of those people. I think churches can provide useful information that would great benefit the local government though how much and what kind of information is hard to determine. One thing I found very interesting from the reading is that after any kind of violent acts such as September 11 terrorist attack or World War II, there has be an increase in religious affiliation. I see this as people wanting a sense of peace and spiritual haven after experiencing these traumatic events.
I felt that the “Giving in a Recession” article was really interesting in terms of why people give. The main motivations are people give because they care about others, it make them feel good, and that is what other expect of us. I feel that these are good reason why people give but people who gives only to make them feel good, aren't really giving at all. They don't care whether the money will be effective and they don't give out of their hearts. I agree with the article that most people would give less donation during a recession because people have less money to give and are trying to look out for themselves.
From the“Estate Tax and Charitable Giving” article, what I found surprising was that the estate tax is returning in 2011 and how it keeps getting lower. I think estate tax should have a higher tax rate because most of those people are wealthy and I can't see why they can't afford to pay it. I see it as a way for wealthy people to pay less tax and get more exceptions from these. I also found it surprising that people are paying less estate tax (half of 1%) than those back in 1977 (10.5%). I think it shows how people are not caring about society as much and only about themselves. People who make lots of money every year should give back as much to society.
In the blog post “Our Ineffectiveness at Measuring Effectiveness”, I found it really true and honest on how ineffective we are at measuring how effective charities are. I mean, lots of money are donating by rich people to all kinds of nonprofit organization but how many of that actually produces real changes in society. The responsibility should be on the donators to follow up and see how their money are being used effective and not just donate and let the organization handle it. The donator as well as the organization need to work together to measure the effective of how the money is being used. I agree that commitment is very important to seeing how effective an organization is and to focus on the right thing.
An interesting idea I got from all these readings was how do government and nonprofit encourage people to give donations without incentives. I see people who give donation only to get tax breaks as not really giving at all because you are expecting something in return. I view the idea of donation as giving something away for free out and expect nothing in return. Do any of you see another positive motivate to give besides tax exemptions?
To address your closing inquiry on the motives that some people have in the process of donations, from my own personal observations I’ve found that the reasoning is often far broader than we expect. Many of my fellow volunteers were there for less than humanitarian reasons (“my high school’s making me do this”, “I need something to put on my resume”, “I needed something to boost my crumbling image”) but most are for a pure passion for the cause at hand. Another facet of donators (mainly based in the money contributors vs. time contributors) understands that a healthy functioning society on all levels will create a better way of living for everyone involved. Even if a certain person is not benefiting directly from an organization, the aid of this program in turn lessons the burden of the government, and in turn gives the government more leeway to benefit those in less immediate need.
ReplyDeleteThe idea you proposed of donator-accountability to measuring the effectiveness of nonprofits is a much better alternative to ways that were presented in this week's readings. Everyone has a different understanding of and expectations for what is "effective", so those who are giving money should be the ones who decide whether or not they are satisfied on a case by case basis. If the donator does not feel that the nonprofit is using its money wisely, then they should be able to influence what is done with their donation or get their money back and take it to an organization that will do something productive with it.
ReplyDeleteIn response to your question about motives to donate, I believe that there are driving factors other than tax exemptions, but they are hard to measure because, just as everyone has a different idea on what it is for an organization to be effective, everyone gets something different out of a donation. Also, someone whose family member died of cancer probably finds it extremely rewarding to donate to or volunteer for an organization that advocates for cures, but their donation has no more monetary value than someone who donated for less altruistic or emotional reasons. I find it hard to believe that people only donate for sake of a tax break because, regardless of whether or not they mark their donation amount on their tax return, once they donate it, that money is gone. I see the tax incentive as the government's way of supporting the nonprofit sector and the work that they do, not as a way to judge the meaning behind the donation. No matter what condition the money is given under, it will always do the same amount of good.
I see that you are very passionate about the legal and economic side of the nonprofit sector, which is fantastic! I think we have a really enthusiastic and smart group this term.
ReplyDeleteI agree with Monica's stance on tax exemptions. No matter the incentive, whether it be for a tax deduction or to cure cancer, money is still being channeled to a nonprofit. Also, it's important to point out that churches are not completely separate from taxation and visits from the IRS. Under certain circumstances, like suspicions of fraud, the IRS can require an audit of churhces. The IRS may examine any church records or religious activities that are not specified in the examination notice. They can do this if there is a "belief" that
1) The organization is tax exempt due to its status as a church and
2) If it is carrying on an unrelated trade or business or otherwise engaged in activities subject to taxation.(http://people.emich.edu/skattelus/gen004.htm)
In response to the estate tax, I think a lot of people who are more financially stable are given the misperception that they don't contribute enough back to the community. I think it's because people are often misinformed about taxes and are not given enough facts & figures behind issues. The "wealthy" do pay more in taxes in accordance with their yearly incomes. The top 1% of taxpayers (Adjusted Gross Income over $364,657) earned approximately 21.2% of the nation's income (as defined by AGI), yet paid 39.4% of all federal income taxes, meaning they paid about the same amount of federal individual income taxes as the bottom 95% of tax returns (year 2007). (http://taxprof.typepad.com/taxprof_blog/2007/10/top-1-pay-more-.html) In turn, their incomes are taxed again when they're alive through a "gift tax" or when they are deceased through the estate tax. I think we're going to talk a lot more about the estate tax on Tuesday.
In regards to your paragraph about the estate tax there some things I can offer insight in. I feel as though tax reform for the upper echelon of tax payers is a particularly daunting tax because of how it is economically framed to our society -- we do not have a higher estate tax because economically those people would be more reluctant to give back into the economic pool. In order to tackle the estate tax problem one must frame it appropriately so as to get everyone on board. There are of course obstacles to reform that must fall into place as well.
ReplyDeleteIn regards to your last paragraph about motivation to give I feel as though it is all too common that the only "incentive" that most people think of is monetary and that does not have to be so. People are going to be willing to give regardless of the incentive, that is not to say that the incentive is not important. I feel that the incentive is a component to a much larger system of the non-profits, non-profits of course benefit from it but do not rely entirely on it.
I agree that the estate tax is designed to benefit the wealthy, it seems to create intergenerational injustice, and this as wealth is transferred to someone through the fortunate circumstances of being born into the right family. Vast accumulations of wealth make it easier to gain more. It seems today that we live in an unfair system, and while it is possible to rise up, it takes much more work in doing so. It seems that federal policy is mostly aimed towards helping the wealthy.
ReplyDeleteHowever, in defending the estate tax, it seems that we need elites to make our society function. For the most part, receiving inheritance does not discourage hard work, but rather allows one to better society. It could allow for leadership roles and innovation that might not otherwise be possible. Furthermore, the estate tax could disrupt a structure in which one grows up in, such as a family run farm, or a home. One could feel disillusioned if suddenly assets around them were seized. Families would continue to try and transfer wealth, but one would have to forfeit assets before actually dying, and there are great uncertainties surrounding timing making the estate tax much simpler.
Perhaps the estate tax is not to blame for unfairness, one could look at areas such as the high interest rates surrounding loans, and the overwhelming costs of health care in our country. Welfare is an absolute joke in our country, the poor have a great amount of difficulty in getting the help they need, and the tax burden falls overwhelmingly on the middle class. It is a good thing we have the non-profit sector to help account for failures from the public and private sectors.