Barlett and Steele...

Marta Russell ap888 at lafn.org
Fri Oct 30 09:05:32 PST 1998


Max Sawicky wrote:


> > I wonder what the charity was. Aid to Contras with Dependent
> > Machetes? Seriously, though, aren't charitable deductions something
> > that by and large only the rich can really take advantage of? Though
> > I do remember seeing somewhere that the poorer one were, the more one
> > tended to give, percentage-wise, of income...
>
> The deduction is available to all, whether or not
> they itemize. Of course, the less your income the
> less easy it is to donate. More annoying than the
> regressivity of the deduction is the fact that it
> subsidizes consumption which has nothing to do with
> altruistic purposes by any definition--a doubly
> regressive deduction, in effect. There was
> a book about six years ago, name escapes me, which
> detailed the nature of the sector benefitting
> from the deduction. Lots of universities,
> country clubs, church activity having nothing
> to do with the poor.

This is an excerpt from Beyond Ramps on the charity EMPIRE Marta

BUSTING ALTRUISM: BENEFITS TO THE RICH

Dickens's ghost tells Scrooge, "if man you be in heart, not adamant, forbear that wicked cant until you have discovered What the surplus is, and Where it is. Will you decide what men shall live, what men shall die?" In both Dickens's story and the MDA telethon plot, the disabled child [surplus population] will die unless the haves donate money. In the end, Scrooge feels better about himself because he raises the father's salary and Tiny Tim's health improves because he is no longer undernourished. A Christmas Carole uses disability to wrench the hearts of the miserly but in the end it is the rich who retain control; they can be generous or they can be stingy, but Dickens leaves no doubt that in nineteenth century capitalist England the vast majority of the poor and disabled were left to misery and squalor. Similarly, while the Tiny Tim tin cups rattle on the MDA telethon stage, the underlying social issues-poverty and a lack of entitlement to the necessities like universal health care and living wage employment that enable a quality life-are not addressed.

The charity system protects the privileged rich who, by donating tax deductible dollars, appear to be generously concerned about the plight of the poor. However, their "solution" actually serves to keep the wealth, resources, and power in the hands of the few. Left Business Observer points out that:

Altruism was rarely the motivating factor in establishing the large independent foundations -

ones like Pew, Ford, MacArthur, Robert Wood Johnson that every NPR listener can name.

The Ford foundation was established to help keep the company in the family without paying

estate taxes. John D. MacArthur, founder of Bankers Life and Casualty Company, never made

any significant charitable contributions during his lifetime, but left his estate of nearly $1 billion

to a foundation rather than to his estranged children. One of the trusts founded by the Sun Oil

heirs, the J. Howard Pew Freedom Trust, was established to "acquaint the American people with

the evils of bureaucracy . . . and with the values of a free market . . . to point out the false promises

of Socialism . . ."12

"Nonprofits" also include "educational" organizations like the Kennesaw State College Foundation, which is under investigation for appearing to be a conduit for tax deductible funds for Newt Gingrich's "Renewing American Civilization" college course, the stated goal of which was to "unseat the Democratic majority in the House."

In addition to serving as fronts for political agendas, nonprofits can create an illusion that they are mending the holes in our social fabric when behind the benevolent front there is an enormous hoarding of wealth. LBO editor Doug Henwood observes that, "In economic terms, the larger nonprofits could be thought of as giant stock portfolios, often with marketing operations grafted on." For instance, in 1992, the nonprofits held $1 trillion in financial assets. Nonprofits are managed independently, primarily by the wealthy elite, but they do not pay taxes. In 1991 the nonprofit revenue was $615 billion or 11 percent of the GDP, none of which was taxed. 42 percent of "nonprofit" money is in stocks and 25 percent is in bonds which means that the nonprofits also have a significant impact on Wall Street.13

Because donors to charities are entitled to a tax deduction, roughly one third of every dollar donated is subsidized by the federal government. That means public revenue which could be going to public welfare is lost to nonprofits. Gregory Colvin, an attorney specializing in tax law writes, ". . . $1.5 million raised and spent through the Kennesaw Sate college foundation . . . could translate into a Treasury loss of about $500,000 in tax savings by Gingrich's donors."14

Arianna Huffington, a constituent of the right-wing Progress and Freedom Foundation, understands this connection. She would have those public tax dollars going into her nonprofit instead. She states, "We are targeting those who think taxes can take care of compassion and ask them to volunteer and to give money [to her Center for Effective Compassion]."15 Huffington gets it. The law lets rich folks donate stocks to their own foundations, then deduct from income the current stock value, totally avoiding capital gains taxes in the process. Her nonprofit increases her ability (her husband is worth over $25 million) to invest on Wall Street and she determines how the profits are spent.

Jerry Lewis understands the Wall street connection. When Kemp and other activists criticized MDA Lewis told then President Bush to "act to protect and preserve the invaluable American private-sector institution. . .with a categorical disavowal of Mr. Kemp's assault on MDA"16, the sacrosanct MDA private charity business complete with its financial portfolios and real estate holdings.

However, the nonprofits, especially the charities, are rarely challenged. As James Cook put it in Forbes magazine, "Most Americans are astonishingly indifferent to how effectively charitable organizations use the money that comes their way ...As they tend to see it, the righteousness of their cause assures the integrity of their conduct, and anyone who suggest otherwise had better watch out."17

At best, charities postpone societal questions about economic equality. At worst, charities serve as self-serving tax shields and allow right-wing ideologues like Newt Gingrich and Arianna Huffington to assault the "socialist" safety net while claiming that private charities will pick up the pieces. In the process the U.S. Treasury is robbed of dollars that could be put to entitlement programs. Charity, as we know it, is nothing less than an attempt to justify capitalism's inherent injustices which makes it a euphemism for economic oppression.

ENTITLEMENT V. CHARITY: THE 20TH CENTURY BEGGARS

Laura Hershey, former poster child and disability rights activist who initiated the "Tune Jerry Out" campaign, explains that a shift in thinking about disability is what is called for:

The disability rights approach views disability as a natural phenomenon which occurs in every

generation, and always will. It recognizes people with disabilities as a distinct minority group, subject

at times to discrimination and segregation . . . but also capable of taking our rightful place in society.18

We need solutions which address reality. The scapegoating of vulnerable populations as costly consumers of tax dollars is reprehensible, and essentially false. The public resources which are distributed to the impoverished and disabled are redistributed in the community-to the pharmaceutical corporations, to the landlords, to the grocery store chains, to the utility companies. The argument that disabled people consume an inordinate amount of our social resources is similarly false; 80 percent of the world's resources are consumed by the wealthiest people.

Why do we still have 20th Century beggars like Jerry Lewis in a so-called civilized nation? The answers lie within the nature of capitalism itself. There is more profit to be made in the construction and equipping of national charity empires than in making public policy fill in the missing gaps. The advertising and contracting opportunities offered by an MDA telethon are more attractive to corporations who can afford the ante of a donation than the wider-spread universal benefit of increases in disability and welfare disbursements.

Just as in Dickens's time, we have not interwoven disability and poverty into the fabric of socio/economic policy so that entitlements replace begging, civil rights replace bigotry and social justice replaces inequity. The nation needs to eliminate tax-free charity status, return the lost revenues to a democratic government to redistribute wealth in a democratic manner. That after-all is what Constitutional "promoting the general welfare" is all about. Private and nonprofit charities doling out arbitrary services must be replaced with a sound disability-sensitive universal health care system which allows all citizens to live with dignity, and we must insist on a guaranteed income floor which leaves no one undernourished. Strengthening the social contract means recognizing its deficiences and making health care and sustenance economic rights, not luxuries. The reality is that neither Scrooge nor the disingenuous "Thousand points of light" nor neo liberal "volunteerism" will be the solution; the public wealth must be distributed more responsibly and a democratic government must be held to the task.



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