In FORTUNE, philanthropist and IACG member Kat Taylor authored an op-ed about the need to modernize our charitable tax laws as charities face financial hardship despite increased giving. She described how charitable reforms can “keep philanthropy from becoming a Wall Street warehouse of tax-deferred money at the expense of creating positive changes in the lives of those most in need.”
Read some excerpts from her op-ed below:
“Wealthy people should also not be able to write the rules of charitable giving. Every charitable tax deduction deprives the government of vital tax proceeds needed to fund public education, infrastructure, and climate change. California, for example, loses more than $340 million each year because of tax deductions given related to Donor Advised Funds (DAF) donations alone, according to CalNonprofits.”
“The U.S. Senate is considering bipartisan legislation that would ensure vital resources get to working charities, so the communities they serve can benefit today–when they need it most. The Accelerating Charitable Efforts (ACE) Act, introduced by Senators Angus King (I-Maine) and Chuck Grassley (R-Iowa), restores the balance between charitable tax breaks for donors and the actual benefits to charities and the people they serve.”
“Wealthy donors promise to give a lot of money to charity, and in return, the government gives them a nice tax break. There is no legal requirement that DAFs ever distribute their money to operating charities. This Faustian bargain is the equivalent of taxpayers picking up the tab for up to 74 cents of every dollar a donor deems charitable, while the other 26 cents often remain dormant.”
“Together, let’s take these commonsense steps to keep philanthropy from becoming a Wall Street warehouse of tax-deferred money at the expense of creating positive changes in the lives of those most in need.”
The full op-ed in FORTUNE is available here.