Charities of the Rich, and a Suggestion
My parents sent me to Catholic schools in Jacksonville, Florida, but I was spared the torture of Bishop Kenny High School when I won a scholarship to The Bolles School. My dad had a military pension plus his pay as a school teacher; he could afford Catholic school, but the private Bolles School would have been beyond his means without the scholarship.
Last week I received a postcard from the Bolles alumni office that reminded me of a scam of major proportions that is seldom talked about (because it is not in the interest of the rich to talk about it). This is the income tax deduction for charitable donations, which are often not really charity at all.
The postcard notified me that two different people gave $1 million donations to Bolles. For a new boat house. Seems the crew (rowing) facilities are inadequate at Bolles. The tennis courts are okay, the swimming pool is state-of the art, the parking lot for the rich kids SUVs is adequate. But the old dock on the St. Johns River is a disgrace.
Me, my mother went to school bare foot and Bolles was where I started learning about the winsome ways of the ruling class. I learned my clothing being clean and within the guidelines was not adequate. One particularly class-insensitive twit (son of a powerful man who would later sit on the Federal Reserve Board) told me a thousand dollar stereo (back then that was half a year's work at minimum wage) was an absolute necessity. I listened to music on a $7 AM radio. But hey, that was all okay, mostly people were very nice to me and I was there to learn. I learned English (funny, I thought I knew it before I arrived there), French, math, and a fair degree of science. Definitely worth the occasional insensitive ridicule.
But what I want to ask you hear is this: what really is a charitable donation? What should be considered a self-serving donation? And as public policy, what should be tax deductible?
I would submit that giving rich kids a boat house is no more charity than giving them allowances for cocaine, although it might be a better use of the money.
In fact, when it comes to private schools, getting a tax deduction means you are taking money away that could potentially be used for public schools. I could go along with a tax deduction for money that goes into a scholarship fund, maybe even a library if it were also open to the public.
I've heard this problem riddles the upper classes. Many prefer to give donations to private hospitals that serve the rich, while ignoring the hospitals that serve the poor. Should that rate a tax deduction?
I also have a problem with so-called educational tax deductions, right and left and middle-of the road, for groups that are really political. I'll go into that in more detail in a later blog.
I don't think that a donation to a religious group is, in itself, charitable. If you are donating to build a church, and you are going to attend the church, I don't see how that is different than building yourself a private home. To get a charitable deduction I would require that the end serve the poor: feeding, housing, healing, clothing, teaching them job skills, or otherwise helping them.
The charitable tax deduction, for the most part, is a scam, and it is a scam that the rich benefit the most from.
People should give to charity because it is the right thing to do, not to get praise and a tax deduction.
My favorite charity? Doctors Without Borders.
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