Real Charity

It's tax time, and many Americans are totaling up last year's contributions to charity. Some of us will pat ourselves on the back for being so generous. Others will feel a little guilty for not doing more. Most, sadly, won't think about it at all.

What, exactly, is "charity?" Most would say it is gifts to help the poor, sick, hungry, etc. In fact, according to a study noted in the Wall Street Journal last week, most of our so-called charitable contributions don't go to charity at all. Where do they go?

The analysis, carried out by the Center on Philanthropy at Indiana University, concluded that only 8% of donations provide food, shelter or other basic necessities. At most, an additional 23% is directed to the poor -- either providing other direct benefits (such as medical treatment and scholarships) or through initiatives creating opportunity and empowerment (such as literacy and job training programs). It's just not true, in other words, that the major beneficiaries of charity and philanthropy are the disadvantaged.

The "charity gap" is even wider among the affluent. Wealthy individuals claim, according to a Bank of America Study, that their giving is driven by a "feeling that those who have more should give to those with less." But people who earn more than $1 million per year give only 4% of their donations for basic needs and an additional 19% to other programs geared toward the poor. MORE (subscription may be required).

How can this be? Simple - the IRS defines "charity" to include most anything non-profit. Museums, universities, ballet, think tanks, opera - all these things are "charity" for tax purposes. Of course they are important and useful, but they don't offer any immediate help to the needy.

Here's an idea: what if we removed or reduced the tax deduction for gifts to these less-than-charitable groups? People would then be encouraged to donate to organizations like the Salvation Army that are far more efficient and compassionate than government agencies that try to help the poor.

Of course, this will never happen because the same people who like to donate to the opera also give to politicians. Most of them sincerely believe they are being generous and helping build a better world. I suppose they are. Do all those the folks living under bridges enjoy opera? Somehow I think they would be happier with a decent meal.