The best and worst of times

   Philanthropically speaking, we are back to the opening lines of Charles Dickens’ Tale of Two Cities: “It was the best of times it was the worst of times….” We have come back from the dip in charitable giving resulting from the market downturn after 9/11. The 15th annual report on charitable giving of the Chronicle of Philanthropy for the 400 organizations nationally receiving the most donations reports an annual increase of 11.6 percent over the previous year.
   Despite this good news, the increasingly complex world of philanthropy is facing some serious challenges. Given its prominent role in American society and a very few highly publicized cases of abuse of power similar to what has been uncovered in business in recent years, our elected officials are responding in a variety of ways and with varying motives. Most of this scrutiny is supported by the nonprofit sector, which has begun many efforts in recent years to run its operations as effectively and efficiently as possible.
   Like Blanche Dubois, most nonprofit organizations depend upon the kindness of strangers. There has been a strong movement toward transparency on the part of individual nonprofits and entire fields of nonprofit endeavor. Codes of ethics, national and statewide standards and certification or accreditation agencies abound these days. This trend has occurred in large part because nonprofit leaders want to do the right thing for the particular causes on which they are working. A second reason is that when charities depend upon voluntary contributions from individuals, businesses, foundations and governmental bodies, it is imperative that potential donors can see very clearly how their gifts or grants are being used and what impact they have.
   Unfortunately, as often happens when responding to a few cases of excessive and even illegal behavior, some of the proposed “fixes” turn out to be a major burden for smaller nonprofit organizations that have always been doing their work honestly and with integrity.
   Another “worst of times” scenario currently unfolding is the rapid succession of major disasters beginning with last winter’s tsunamis, hurricanes Katrina, Tina and Wilma in this country and the vast devastation of the recent earthquake in India and Pakistan.
   What this may be producing is something I would call “philanthropy fatigue,” which could be the result of too many overwhelming human crises in too short a time. The best intentions of well-meaning and generous people have their limits when each disaster seems worst than the previous one. Other factors enter into charitable considerations, such as how close to home it is and how well we can put ourselves in the shoes of others. Relating to the personal tragedies of the tsunamis and the hurricanes in the Delta region were a pretty easy stretch, although it remains to be seen how much the whole country is willing to do for New Orleans over the long run. Already it is easy to see how the resolve is fading away in the face of all the other choices we have in how we spend our common wealth and our individual, family and business resources. Early reports indicate that our response to India’s and Pakistan’s enormous devastation is lagging far behind the tsunami and Katrina responses for the first five weeks or so. This may well be a case of “philanthropy fatigue,” and it may also be fueled by a larger disconnect with the people of those two beleaguered countries.
   Enough “worst of times” reminders; there are a couple “best of times” options that many people might not know about that both potentially create some tax savings and free up some money for charity that many may not feel they could otherwise afford. A recent law passed primarily in response to Katrina’s widespread havoc allows donors to write off up to 100 percent of their income for cash donations to Katrina charities made from August 28 through December 31 of this year. Normally, the maximum is 50 percent, so this could be significant for those who have the resources to do some additional giving at a time when they either do not have much annual income or can give more from their income and draw upon other resources. While short term in nature, this response by the government is welcome to those who wish to do more but have to face some financial realities.
   Those 59.5 or older can also take money out of various retirement funds with no penalty, which could mean that selling some stocks and making cash gifts with the proceeds might provide some tax breaks. Individuals with uncompleted multi-year pledges might also want to take advantage of this temporary 100 percent deduction window by paying ahead on some or all of their pledges. Contact your financial advisor for details.
   For business owners or individuals who would like to encourage employers to help free up some additional charitable dollars for hurricane Katrina relief and rebuilding, there is also something new. The “leave-based donation” plan allows employees to return to their employers accrued vacation days that would reduce an employee’s income and give the employer a business expense write-off equal to those foregone vacation dollars donated to charity. More information about this is available at,,id=147373,00.html.
   Yet another way to get into the “best of times” column is to do what many musicians and other individuals are doing to help Katrina victims in particular. This involves using whatever skills you have that can be revenue producing to attract donations to Katrina relief. A nonprofit consultant in town, for example, has been asking for direct donations to a Louisiana charity in lieu of pay for work done.
   In the face of these extraordinarily cataclysmic events elsewhere that have captured our attention it is important that we not forget our local charities, for they are always struggling to do additional important work in our local communities. Two local donors certainly did not forget, for they recently committed $125,000 and $1 million outright gifts to two Whatcom County nonprofits. That kind of community spirit will continue to keep us moving toward the best of times, even when we have those among us experiencing the worst of times.

Don Drake has spent twenty years working in executive
roles in philanthropy. He served as president of Whatcom Community Foundation from 1997 until September 2005.



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