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Advisors: Help protect precious nonprofits by avoiding these four mistakes

Why Warren Buffett is wrong about charitable giving

Author Benjamin Valore-Caplan, Guest Columnist December 30, 2009 at 4:27 AM
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Benjamin Valore-Caplan: It takes a lot of intellectual gymnastics to view a tax deduction for a charitable gift as a subsidy in the pejorative sense, but clearly there are some policy wonks who are quite flexible.

Warren Buffet



December 30, 2009 — 6:06 PM

You call demanding a turkey digging your heels in? What do you call demands for PT0, health care, and pensions? Those dirty workers with their unions and their need for security. How dare they resist the notion of working until the day they die? Benjamin, you are what’s wrong with our country. Taking power away from the government is the same as taking power away from the People. What makes you think there is anyone more fit to determine the fate of the People than the People themselves? Your capitalist propaganda is dangerous to democracy.



December 30, 2009 — 6:43 PM

Hilary – with all due respect, it’s not Benjamin but rather you and others who think like you that’s what’s wrong with this country. Our “citizen” sector of non-profits and philanthropists who support them is a unique and effective structure which has worked for decades to better our society (if you don’t think so take a look at the nascient non-profit sectors in China or much of socialized Europe) – - and Benjamin makes some excellent points that the current tide may well serve to significantly diminish the good this sector can deliver moving forward.

It’s not surprising given the current political environment that the liberal elite see the philanthropic sector as yet another that should be taken under the centralized control of the PEOPLE = = my only question is don’t we have enough to do already now that the PEOPLE control the banking and auto industries and will soon control the delivery of health care as well ??

John Hallward

John Hallward

December 31, 2009 — 1:31 PM

I think we are all best served by focusing on the facts rather than pointing fingers at each other as to whether our problems are due to “the capitalists” or “the liberal elite”. Let’s discuss, with open and strategic minds, the merits of the issues, the nature of the problems we are trying to solve, the intent of the solutions, and so on. I believe Buffet is simply saying that there is something fundamentally wrong with creating endowments with money today, and giving a tax break today (from tax payers collective wallet), but then allowing the money to be used in future generations when these future generations did not contribute to the endowment, nor experience the lost taxes offered as a tax credit. The money and the benefit should be experienced by the same generation that comprised the wealth and offered the tax credit. Furthermore, we have problems today, as a reflection of today’s shortcomings. Let’s fix them, and recognize that there will be future donors and philanthropists to help fix future problems. And to be clear, when we talk about acting “today”, it does not preclude a longer-term solution because we do not restrict the meaning of today to be literally a consideration of just a short term solution. Ben, I would be curious to hear some of your thinking about why holding money back for later generations is relevant to today’s society which comprises this wealth, and offers the current tax credits.

I agree that reducing tax credits is likely taking us in the wrong direction. Instead, I feel that we should have different classes of tax credits, with a higher tax credit for those charitable organizations which truly help those in need (and perhaps a lower tax credit for non-profits which are not addressing current social problems, such as 'the arts’, Ivy league universities, and so on).

I find it interesting that America, as the riches nation (per capita) with the greatest freedoms, is not one of the top ten most happiest countries in the world: http://www.thehappinessshow.com/HappiestCountries.htm . Why is this? There is something wrong in the assumption that wealth and capitalism leads to the best outcome in life (health and happiness). I also suggest an interesting read, “Civil Society” by Michael Edwards. He makes some good arguments about the role of government (not too much, and not too little). I think this starts to focus the discussion on possible solutions….for whatever political stripes we each wear.

Mentioned in this article:

Syntrinsic Investment Counsel, LLC
RIA Serving Endowments/Foundations
Top Executive: Ben Valore-Caplan, Managing Partner

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