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Today, there is some discussion about “canceling philanthropy.” Some people believe that the charitable tax deduction takes from government revenue funds that could be more useful if allocated by bureaucrats.
Some romanticize the consistency of government programs and criticize the variations of philanthropy. Philanthropy is individualized. If empowering people and building self-governance is a goal, then a personal approach is essential. But as Mother Theresa said, “The administrators of government programs must focus on the crowd.”
Democratic societies flourish as a three-legged stool: government, a free market and philanthropic organizations. Philanthropists measure community needs by different metrics than government and focus on different causes. Their individual decisions lead to many ways of spending money in an attempt to better the human condition. This diversity in spending would not be possible if we adopted a theory that only the state could spend for the public good.
The philanthropist often gives time, not just money. This improves accountability, which can lead to better outcomes. By contrast, when the government allocates resources, feedback mechanisms are weak.
We vote with ballots to elect officials and with our wallets for philanthropic causes. This suits American individualism. Praise for philanthropy has been a staple of U.S. political rhetoric since the colonial days, when Ben Franklin headed up an effort to grant tax relief in exchange for charitable contributions. Centuries later, shortly after it established the modern federal income tax, Congress included a charitable tax deduction in the tax code. Ronald Reagan justified a cut in government spending by appealing to America’s preference for volunteerism, and George H.W. Bush embraced America’s various volunteer efforts, calling them “a thousand points of light in a broad and peaceful sky.”
Now is not the time to cancel philanthropy. Now is not the time to minimize or eliminate the federal tax deduction for charitable contributions. Now is, however, the time to remember the wise words, attributed to politicians ranging from Thomas Jefferson to Gerald Ford: “If your government is big enough to give you everything you want, it is big enough to take away everything you have.”
