A Wall Street Journal article today from the end of last month highlights a threat to foundations nationwide. Members of Congress are saying that foundations have an obligation to use the money they save with tax exemptions – money that otherwise would have gone to the federal government – where it will have the greatest impact on public good. Meaning – where Congress thinks it will have the greatest good. If they do not feel that foundations are doing this, they are threatening to get rid of charitable tax exemptions.
To counter this threat, a new organization called the Philanthropic Collaborative commissioned a research project to convince policymakers of the benefits of philanthropic dollars. The study finds that foundations have a much more positive economic impact on society than we had thought, that “for the $43 billion that foundations spent on grants in 2007, they created direct economic benefits of $368 billion.”
Perhaps policymakers will find that the benefits of foundation work ‘as is’ will significantly outweigh any gains that could be gleaned by denying them their charitable deduction.