Charitable donations in the United States tend to peak during the holidays. As Meagan Day has observed, this tradition of seasonal giving expresses something of a paradox: a temporary suspension of the wider attitude, so prevalent among the wealthy, that poverty results from personal or moral failing. For a fleeting few weeks every year, it seems, there is implicit acknowledgment in the more privileged ranks of American society that wealth is distributed unfairly and that the poor, by extension, do in fact deserve better.
In their giving this holiday season (and throughout the year), wealthy donors will be aided by the federal charitable tax deduction. Supposedly designed to incentivize charity (particularly among the rich — the measure was introduced in 1917 following a big increase in the top income tax rate) the deduction enables anyone who gives to deduct the amount from their stated income for tax purposes.
Institutionalizing and encouraging generosity as public policy — on the face of it, who could possibly object? But whatever its official purpose in theory, the deduction looks less irreproachable in practice.
For one thing, it costs the public purse a whole lot. According to the Internal Revenue Service over $60 billion in prospective federal tax money is forgone every year, courtesy of a measure supposedly designed to boost worthy causes and mitigate suffering. It’s not hard to imagine much better uses such a vast sum of money could be put to; it’s already eight times more, for example, than is currently spent on the Head Start program, which provides a range of services to low-income children.
For another, its principal beneficiaries are the well-off. Data from the Tax Policy Center shows that some 74 percent of those who make use of the charitable tax deduction have incomes in the top 20 percent. Moreover, its regressive nature means that those in lower-income brackets who do make use of the deduction end up receiving a much lesser benefit: after all, the higher the income bracket a taxpayer is in, the bigger the reduction in their taxes from any given donation. As a result, those making $100,000 or more a year receive some 76 percent of the benefits accrued from deduction.
There’s also the not insignificant issue of how broadly we define charity. True, for plenty of people, charitable giving implies donations to food banks, soup kitchens, or other worthy initiatives. But look more deeply at some would-be charitable enterprises and you often find a kind of giving that is less munificent and more obviously self-interested — think of huge donations to Ivy League universities or other elite institutions. It would be hard to argue in good faith that this kind of blatant privilege replication should enjoy the same tax incentives as, say, donations to give poor children a healthy breakfast or to help victims of domestic violence.
In some cases, charitable giving as defined by the American tax code borders on absurdity, amounting to little more than plutocratic vanity underwritten by the public purse. Some years ago, for example, billionaire Mitchell Rales landed a big deduction by donating his expensive collection of modern art to a private museum constructed next door to his own home. Of course, charitable donations can represent expressions of compassion — particularly when they involve genuine personal sacrifice. And taken as a portion of their total incomes, the charitable impulse seems to be stronger among low and middle earners than it is among the rich.
But the ultimate problem with Big Charity is that the greatest beneficiaries of America’s deeply hierarchical society are rewarded for occasional efforts to mitigate some of the very problems they are actively involved in perpetuating.
The exercise of private morality by powerful people whose actions harden or maintain social problems isn’t just an inadequate solution to those problems; it’s a very real expression of them. The venture capitalist who gives money to a school district, on condition that it train his future workforce at public expense. The CEO who donates to a hospital before sending an army of blood-sucking lobbyists to Washington to fight a Medicaid expansion. The industrialist who makes a well-publicized contribution to a local food bank on Christmas Eve before ushering in the new year with a fresh round of pink slips or wage cuts. The real-estate tycoon who gives money to a homeless shelter while pricing out a neighborhood’s residents to enrich investors.
To take a particularly egregious example, the Koch brothers, who’ve now spent several decades actively undermining measures designed to fight poverty, proudly offer alms to the poor — if they’re willing to listen to sermons about the miracle of free enterprise while sipping their soup. For years, Canada’s top hospital donor was the late Peter Munk — a billionaire mining magnate who gave vast sums of money to health-related causes while simultaneously pumping money into right-wing organizations working to privatize the country’s healthcare system.
At its worst, this type of philanthropy isn’t just hypocritical: it actively seeks to perpetuate the very injustices that the institution of charity purportedly exists to alleviate — and often rewards their architects with plaques, patronage, and public prestige in the process.
The holidays may be a time of greater individual generosity, particularly among the affluent and well-heeled. But so long as this kind of privatized morality is allowed to be a substitute for a richer collective ethos of humanity and solidarity, the spirit of giving the season supposedly represents will remain dismally poor in its practical consequences.