Leslie Lenkowsky: “obvious solution” to “money not really being used for charitable purposes” is to end “tax deduction for all contributions.”
Independent Sector hosted an interesting and informative webinar last Thursday, “SpACE for Trust: the ACE Act and Trust in Philanthropy.” During the event, knowledgeable and experienced panelists explored the proposed Accelerating Charitable Efforts (ACE) Act and the nature and extent of public-policy changes that might rebuild trust in philanthropic institutions.
Victor Tolomeo, a senior research manager with Edelman Data & Intelligence, began with a presentation summarizing the results of an online survey that Edelman conducted with Independent Sector earlier this year about trust in nonprofits and philanthropy.
According to the Edelman/Independent Sector research, Tolomeo said, 30% had high trust in philanthropy in 2021, down from 36% in 2020. Twenty-six percent had low trust in philanthropy this year, up from 21% last year.
Among the reasons cited by the 26% who had low trust in philanthropy were “Money doesn’t go where they say it should” and “Political bias.”
Another welcome jolt
At the end of the webinar, after observing that the ACE Act addresses only a small part of the philanthropic world, Indiana University Lilly Family School of Philanthropy professor emeritus Leslie Lenkowsky administered his own version of what in another, similar circumstance, one of us has termed “a welcome jolt.”
“In the longer version—correct me if I’m wrong, Victor—of the Edelman study,” Lenkowsky begins at just past 52:30 into the video of the Independent Sector event,
I think one of the drivers of distrust you noted in philanthropy was the perception that tax benefits were being taken, but the money was not really being used for charitable purposes, if I remember that correctly. And I think that is true, but the obvious solution is, let’s end tax-exempt—um, tax deduction for all contributions.
Some seconds’ worth of silence followed, after which former Minnesota Council of Nonprofits executive director Jon Pratt offered a reply.
“Heaven forbid, Les.”
Endings, proposed and actual
Lenkowsky, who was speaking for himself, not the Lilly Family School of Philanthropy, answered, “What’s wrong with that? We want … We’re concerned about the wealthy taking unfair advantage. We’re concerned about people being critical of, people getting away with it by taking tax deductions. Let’s end tax deductions.”
Well, so much for the supposedly controversial ACE Act.
Moderator Regina Bell of the Council of Michigan Foundations concluded the conversation. “Well, Les, Jon, and Victor,” she said, pausing for what sure seemed like pretty nervous laughter, “that is some note to kind of end on.”
2 thoughts on ““Heaven forbid, Les””
I appreciate hearing the reasons for the 26% of low trust in philanthropy. I will note that the core of each of these four issues lies with individual nonprofits, their boards and staff. They do not primarily lie with those institutions that fund nonprofits (foundations or DAFs). Therefore the increased regulation of foundations and DAFs, the key feature of the ACE act, is not the right solution.
The obvious solution is to not end all deductions for charitable purposes. The obvious solution is to end political uses of charitable contributions. The law can be revised.