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.