Biting the Hand that Feeds Us?

by David H. King of member firm Alexander Haas

Over the past four years, there has been a lot of political rhetoric about the top three percent of income earners in the United States. Most of this rhetoric has been intended to somehow demonize this group because of their perceived success…and also to create a perception that they do not do their “fair share” (the President’s words, not mine).

Many in the nonprofit sector have started to jump on this bandwagon. This attitude, however, is a dangerous and slippery slope for nonprofits. In fact, it is akin to biting the hand that feeds us. You see, if you turn off the talking heads and spin doctors, the fact is that the nonprofit sector is extremely dependent on the top three percent. In fact, this very group who are oft criticized for not doing their “fair share” actually account for more than 66 percent of all charitable giving year after year. This means, of the approximately $300 billion contributed, $200 billion comes from this top group. According to a Bank of America study of high-net-worth donors done by the Center on Philanthropy, 71 percent of high net worth donors contribute to cultural organizations and 80 percent contribute to education, versus only 7 percent and 15% of general donors. Take away their tax deductions, or increase their tax rates while freezing their deductions, and you run the risk that this top group will pull back their philanthropy as well.

Today, after 2 years of decreased total giving in the US, we are all anticipating that the pie will start to grow again.

So, whether Republican or Democrat, tea partier or progressive, when the rhetoric of the “evil rich” comes up, think of your donors who fall into this category. Are they really as bad as they are being made out to be? Or, are they generous people who care about their country and their community and go above and beyond paying taxes to support good causes? Would the government do a better job spending the $200 billion than your organization and others in the nonprofit sector do already? Remember, the dog that bites the hand that feeds him often starves.

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4 Responses to Biting the Hand that Feeds Us?

  1. Carlene Wilson says:

    That’s an excellent point and in my years on earth I do not see evidence that the government would make good use of that money at all…

  2. Amen Brother. It always bugs me when I hear someone using the phrase “fair share” when talking about someone ELSE when it comes to giving! Unless they are able to look at their bank account(s), how do they really know? And what gives them the right to say someone else is not giving enough? It’s not their money. It might be time to take a look at ourselves.
    My wife and I are not part of that 3% (yet) but I hope to do some serious giving above what we are already doing in the near future.
    PS – Congratulations on being featured on the Dave Ramsey show! I had a post read back on July 23, 2010, “10 Things We Say That Keep Us Broke”. That was fun!

  3. Excellent. Thank you for sharing this. I especially appreciate the data to support your position.

  4. Dave, this is right on. Thank you for saying what I believe many of us are thinking.

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