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Tuesday, September 19, 2006
Estate Tax: Where Are The Charities?
A repeal of the estate tax may decrease charitable giving, yet charities have been largely silent on the issue. From Bloomberg News:
That's the dilemma facing charities, universities, museums and other organizations that rely on donations as Senate Republicans consider another vote on permanently reducing the tax as early as this week. Most of the organizations are following [James] Tisch's advice, keeping mum on the issue in deference to their most generous patrons: the very wealthy who often serve on their boards.
``It's very difficult for some of them to confront their own board members,'' says Diana Aviv, president of the Independent Sector, a Washington-based umbrella for more than 500 non-profit groups that is the only organization of its kind lobbying to keep the estate tax.
Repeal of the estate tax would remove or reduce incentives for wealthy individuals to donate, potentially their non-profit beneficiaries as much as $25 billion a year, according to a Congressional Budget Office study.
This shouldn't be an issue. How can these wealthy folks, on the one hand, say they support the social services that charities provide, and on the other, support a tax cut that would lead to drastic reductions in both government and charitable social services?
Tisch, whose family has billions of dollars in assets, says he favors keeping a form of the estate tax that imposes a levy on unrealized capital gains at death. He also says charities should stay out of the fight because it ``dilutes'' their charitable mission when they become involved in policy debates in which they have little or no expertise.
It also "dilutes" the "charitable mission" of wealthy donors when they use their influence over charities to promote their political interests. The estate tax is in the interests of charities, for many reasons. You don't need to be a wealthy donor to understand that. Charities that do understand what their interests are ought to be able to represent themselves in a political debate on which their operation greatly depends. It would "dilute" their mission not to.
Donors who, with these kinds of threats, limit the free-speech of charities should be ashamed of themselves. They have turned an act of generosity and public-spiritedness into giving hush-money that furthers only their narrow self-interest. If the people who control charities are to be good stewards, they ought to let charities fight for their survival.
Posted by Matt Lewis
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