Free charity

By Todd Cohen

Charities must fight for a charitable marketplace that is open and fair.

While that should be its goal, the Panel on the Nonprofit Sector is not pushing Congress to fix skewed rules that let donors and foundations manipulate that marketplace.

Charitable tax breaks should spur charitable giving, not give wealthy donors unchallenged market power.

Yet the rules set by Congress create a charitable monopoly.

Donors can take big tax breaks up front when they create foundations, charitable funds or supporting organizations.

And those philanthropies, which donors can continue to control, must give away only a sliver of their assets each year.

So donors and philanthropies are free to restrain charitable trade.

They do that through a philanthropic-industrial complex that includes consultants and management-assistance groups who, needing grants to sustain themselves, peddle the doctrine and priorities of donors and philanthropies to charities hungry for all the help they can get to secure support.

The result is a marketplace built on fear.

Afraid to anger donors and board members, for example, charities have failed to fight congressional efforts to kill the estate tax, a change that could cost charities billions of dollars.

Charities must push Congress to make the charitable marketplace free.

Todd Cohen is the Editor and Publisher of the Philanthropy Journal.

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