Are billionaires turning charity into a tax dodge?

Americans sent half a trillion dollars to charity last year—a substantial chunk of money to pay for worthy causes left unaddressed by the government and corporations.

But a huge portion of that money isn’t going to food pantries or scientific research or even churches. Instead, the ultrawealthy, including many billionaires who have pledged to give away their technology or stock-market-fueled fortunes, are funneling their wealth through opaque financial instruments, where it can sit for years tax free without touching an actual charity, according to a new report from the progressive think tank Institute for Policy Studies.

“There's a fair amount of charitable dollars that are not being deployed, where the donors have already gotten a tax break,” Chuck Collins, director of the Program on Inequality at IPS, told Fortune.

More than one-quarter of charitable giving in the U.S. last year went to donor-advised funds, or DAFs, according to the National Philanthropic Trust. DAFs are vehicles that give the donor an immediate tax deduction, but allow money to sit potentially for decades without being used for actual charitable work.

DAFs are the fastest-growing type of charitable investment, according to Fidelity. Among the ultrawealthy, they are the most popular, and many of the headline-grabbing billionaire donations in recent years have gone to DAFs.

In 2021, Bill Gates donated $15 billion; Elon Musk gave $5.7 billion, Jack Dorsey gave $700 million, and Mark Zuckerberg $700 million—but rather than individual charities, those donations all went to the donors’ DAFs or family foundations, IPS notes. Last year, more than two-thirds of the billionaires who signed the Giving Pledge, a nonbinding promise to give away the bulk of their wealth to charity in their lifetimes, gave either to donor-advised funds or their family foundations.

Proponents of DAFs say that their structure encourages giving: The tax deduction encourages wealthy patrons to dedicate money for charity even before they’ve decided which cause to support. “Donors may have good reasons to postpone grants,” a Stanford Law School article says.. In one hypothetical, a tech founder who “sells a startup for millions of dollars” may want to donate her takings but is too busy to immediately decide how to direct the funds; a DAF is a good choice for this person, the law article notes.

However, while DAFs could in theory grow the charitable pie, in practice, they too often allow the donor the illusion of charity while letting them keep control of their funds, critics say.

Read the rest here.

Non-Profits Are Seeking IRS Classification As "Churches"

From Religion Clause: 

Both Baptist News Global and ProPublica have recently published lengthy investigative articles on the growing number of non-profit entities that have sought classification by the IRS as a "church" or "association of churches" or an "integrated auxiliary of a church." this exempts them from filing the annual Form 990 required of other non-profits. Form 990 disclose income, expenditures and compensation of officers, directors and key employees.

A plea from the newly established Three Hierarchs Academy (Florence, AZ)

Holy Trinity Seminary Appeal

Holy Trinity Seminary needs help. Thanks to a generous benefactor any donations received by midnight tomorrow will be tripled. Sadly seminaries do not operate out of thin air. They have real bills and expenses. If your circumstances permit, please consider giving.

An appeal

I don't usually post solicitations on here, but I am making an exception in this case. Holy Trinity has been struggling for a number of years. So if by chance you have some extra cash, please consider making a donation. Even a small one would help.

Pope Francis and the Social Gospel

Standing before a statue of Mary near the Spanish Steps on the Feast of the Immaculate Conception, Pope Benedict XVI reminded his listeners that the Gospel is the good news of freedom from sin, that it is "the proclamation of the victory of grace over sin, of life over death."  Proponents of the "social gospel" have forgotten this.  The mission of the Church is not to eradicate poverty or social injustice.  As Dr. Dietrich von Hildebrand explains, while "a deep interest in the earthly welfare of our neighbor is a central duty of the Christian and an essential demand of the love of neighbor," still, "it is definitely no part of the message of Christ that there is to be no more poverty, no more war, that the earth is to become a natural paradise."

Proponents of the "social gospel" fail to understand, as Dr. Hildebrand reminds us, that "..the primary task of the Church is the proclamation of the divine Revelation, the protection of it against all heresies, the the sanctification of the soul of the individual, the securing of his eternal salvation - this is the spreading of the kingdom of God on earth, and not the attempt to build up an earthly paradise." (Essay entitled This-Worldliness).

Dr. Hildebrand explains that, "...the motive of many for eliminating poverty (which itself is not morally wicked, but only a morally relevant evil) is not rooted in the spirit of Christ or His Gospel, but in a humanitarian ideal.  The widespread tendency today to demand everything as a right and to refuse to accept any gifts is surely no manifestation of a Christian spirit.  There is in reality a clear, sharply delineated difference between justice and love.  Justice can and should be protected and demanded by state law; but love of neighbor could never be demanded by any law.  For it is a duty before God, and no state law could or should prescribe it or enforce it.  Love of neighbor presupposes the fulfillment of the claims of justice, but it goes far beyond this.  The words of the Gospel, 'if someone asks you to go one mile, go two miles with him,' clearly go far beyond the sphere of justice.  Of course, it is a pharisaical hypocrisy to the demands of justice as if one were giving alms.  But it is a terrible pride not to want to accept any alms, and to demand that which comes as a gift.  The true Christian should be happier to receive alms and to be grateful for them, than simply to receive what he has a right to.  When he receives a gift he is happy not only over the good which is the gift, but also over the goodness of the giver; and he experiences it as a great source of happiness that he can and should be grateful."

Read the rest here.

I have for sometime been wondering if one of the Pope's objectives is not to turn the RCC into a sort of liturgical Salvation Army.

A Note on the Philippines

Prayers are needed, but material aid is of critical importance if a great natural disaster is to be prevented from becoming a humanitarian catastrophe. There are huge numbers of people including women and children who are in want of the most basic necessities of life including food and safe drinking water. Please do not donate clothes or food. The logistics of moving donated items to major disaster areas is such that it is almost always better to give cash. The various charitable agencies with great experience in handling disaster relief know what is needed and how to get it quickly and cheaply from point A to where it is most needed.

If you can spare a little money please consider a contribution to a reputable charity.

A Class Act

Former President George H.W. Bush (41) shaved his head as a sign of support for the son of one of his Secret Service guards who has been stricken with cancer.

Read the story here.

Prayers for the boys recovery.

More bad news

I have received the following email from the Hermitage of the Holy Cross.

At around 6:00 AM on Pentecost Sunday, a fire burned down the Convent of the Nativity of the Virgin Mary as well as the attached candle factory, which were located on the grounds of the Hermitage of the Holy Cross. By the grace of God, the fire caused no injuries to Mother Theodora or to any of the Hermitage community members, although the damage to the Convent is totally irreparable and nearly everything in it was destroyed. It is not yet clear what started the fire, but in the words of Mother Theodora, "God has allowed this so that we will repent for our sins." We will post updates to this page and to the main Hermitage website as more information becomes available.

In the meantime, Mother Theodora is left with no cell, no means of livelihood and only the clothes on her back. She is in great need of everyone's prayers as well as whatever financial assistance you are able to give. You may make your donations on the Hermitage web site or by mailing a check with "Convent Rebuilding Fund" in the memo line to:

Hermitage of the Holy Cross
Attn: Gift Shop
505 Holy Cross Road
Wayne, WV 25570-5403

Thank you, and may God reward you for your prayers and kindness!

Thought for the day...

From Byzantine Texas.

Obama and Romney Meet Over Jokes And Tails

Both presidential candidates took the night off (sort of) from campaigning to attend the annual Al Smith charity dinner held in New York. The event is sponsored by the Roman Catholic Archdiocese of New York, raising millions for Catholic Charities, and regularly attracts the 'A list' of New York politicians and high society figures. In presidential election years it has become a tradition for the nominees of both parties to appear at the dinner and deliver usually humorous remarks to the crowd. Over the years the dinner has attracted its share of luminaries including Sir Winston Churchill. It also has gained a measure of fame as one of the last remaining society functions with a formal (white tie) dress code.

See here for Governor Romney's speech.
See here for President Obama's speech.

Interview With Canadian Billionaire Frank Giustra

This is a fascinating interview on a wide range of topics including economics, American politics and philanthropy. I was really impressed and highly recommend it.

Orthodox - Catholic Ecumenism Done Right

It is a contrast evident not only in the capital; it is a part of the system. The poverty in Moscow and St Petersburg is glimpsed only from afar, guessed at in the giant concrete slab apartment blocks. But just a few kilometres outside Moscow the roads end in tracks, then lead through alleys of wooden houses. Even in the rich and glittering Saint Petersburg, with its golden domes and magnificent buildings, the Hermitage and the splendid cathedrals – even here there are the soup kitchens. Down a winding back alley in a narrow courtyard, aid workers of the Maltese Cross provide 300 to 400 people with a hot meal each day. Open, friendly faces, clean benches and tables – here the poor can experience the warmth of a practical, living Christianity. "We can learn from the experience of the Catholic welfare organisations, from their work in social issues", says the rector of the Orthodox seminary in Saint Petersburg, Episcopal Vicar Ambrosij (Ambrose) of Gatshina. Certainly, in the new social issues there are many major challenges for the Orthodox Church in Russia. They have begun to approach them systematically. Seminarians help to care for the poor and the handicapped, and visit prisoners in the jails. And marriage and family issues will now find a place in the general curriculum for their training. "Almost four out of five families break up", Bishop Ambrose estimates. Another related social problem is that of single mothers.

Read the rest here.

Lots of emphasis on charity without the push for inter-communion. That is refreshing and helpful.

Salvation Army loses discrimination case

It sounds rather complicated but this may be a legal blip due to the wording of a particular statute.

Man dumps expensive brick in charity box

A gold bar weighing in at one kilogram was dropped into a charity collection box in the Belarussian city of Brest, the country's ONT television reported on Friday.

The gold bar was discovered in a charity box set up in a grocery store to collect money for the Orthodox Church. It is unknown who donated the $50,000 gold brick, but the anonymous donator also took the time to slip the brick's certificate of authentication into the collection box as well.

According to the store's security personnel, a middle-aged man dumped the gold brick into the box. The man had apparently earlier attempted to hand the brick to a local church groundskeeper, however he refused to accept the donation.

A local church official said the donation would be enough to almost completely pay for the construction of a new church.

Source.

Obama turns his back on Catholics

In 2009, the University of Notre Dame set off months of intra-Catholic controversy by inviting a champion of abortion rights to deliver the school’s commencement address. When the day arrived, President Obama skillfully deflated the tension. He extended a “presumption of good faith” to his pro-life opponents. Then he promised Catholics that their pro-life convictions would be respected by his administration. “Let’s honor the conscience of those who disagree with abortion,” he said, “and draft a sensible conscience clause, and make sure that all of our health-care policies are grounded not only in sound science but also in clear ethics, as well as respect for the equality of women.”

Catholics, eager for reassurance from a leader whom 54 percent of them had supported, were duly reassured. But Obama’s statement had the awkward subordinate clauses of a contentious speech-writing process. Qualifications and code words produced a pledge that pledged little.

Now the conscience protections of Catholics are under assault, particularly by the Department of Health and Human Services (HHS). And Obama’s Catholic strategy is in shambles.

Shortly before Obama spoke at Notre Dame, the American Civil Liberties Union of Massachusetts brought suit against the U.S. Conference of Catholic Bishops (USCCB), seeking to eliminate a grant to programs that aid victims of human trafficking. Because Catholic programs don’t refer for abortions, the ACLU alleged that public support amounts to the establishment of religion.

The Obama Justice Department defended the grant in court. But last month, HHS abruptly ended the funding. It did not matter that an independent review board had rated the bishops’ program more effective than those of its competitors — or that career HHS employees objected to the politicized handling of the grant. HHS announced it was giving preference to grantees that offer “the full range of legally permissible gynecological and obstetric care.” This was described by one official as “standard procedure.” So it is now standard procedure in the Obama administration to deny funding to some Catholic programs based solely on their pro-life beliefs.

Read the rest here.

Moscow authorities raze Mother Teresa shelter

As Moscow prepares to unveil a bronze monument to Mother Teresa, the city authorities have demolished a shelter owned by her Catholic order, citing a lack of permits for the running of the building.

The two buildings in eastern Moscow which served as a shelter for the homeless and disabled attracted the City Hall's attention three years ago when the local authorities went to court to force Missionaries of Charity, a Catholic religious organization founded by Mother Teresa, to demolish one of the buildings and remove the top floor from the other.

"No country has ever launched legal proceedings against Mother Teresa's organization," said shelter volunteer Yelena Blinova.

Though Russian Orthodox Church officials, including Patriarch Kirill, tried to resolve the conflict, one of the buildings was destroyed on Friday.

"The demolished building was constructed with voluntary donations from people all over the world, and its destruction is a sign of blindness to human grief and contempt for those who help the poorest," Missionaries of Charity said in a statement, published by the Roman Catholic Archdiocese of Moscow.

"Everybody knows how hard the sisters have worked for the past 20 years. Did their work bother anyone?" said Pavel Pezzi, metropolitan archbishop of the Roman Catholic Archdiocese of Moscow.

City Hall authorities refused to comment.

Read the rest here.

Illinois probing Catholic groups for adoption discrimination

(Reuters) - The state of Illinois is looking into allegations that several Catholic groups providing adoption services for the state illegally discriminate against unmarried and gay couples, a lawsuit filed on Tuesday showed.

In a March 8 letter to the charitable arm of the Diocese of Springfield, the Illinois attorney general's office said it was investigating reports the group "discriminates against Illinois citizens based on race, marital status and sexual orientation in its provision of foster care services."

The letter, which was included as an exhibit in a lawsuit filed by the charitable arms of the dioceses of Springfield, Peoria and Joliet, warned that such policies violated the Illinois Human Rights Act, a statute that bars discrimination, harassment or retaliation based on marital status or sexual orientation, among other things.

In the March 8 letter, Attorney General Lisa Madigan asked the diocese, which has a contract with the state's Department of Children and Family Services to help place children, to turn over a host of internal documents, including "all policies and requirements for adoptive parents and foster parents."

Read the rest here.

Royal Wedding: 'Skip the gifts and give to charity'

Prince William and Kate Middleton have asked wedding guests and well wishers to donate to their own special charitable fund rather than give them presents, St James’s Palace has announced.

The gift fund will support 26 charities of the couple’s choice, incorporating the armed forces, children, the elderly, art, sport and conservation.

Each was hand-picked and chosen with careful thought.

Many of the organisations are small local projects with extremely limited budgets and they spoke yesterday of their great delight and surprise at being chosen, acknowledging that the recognition alone was a real boost.

Read the rest here.

Very classy. Maybe this will start a trend.

They won the lottery... and then gave it all away

An elderly couple who won around $11 million from a lottery ticket in Canada have given the money away to good causes and family, according to media reports.

Violet and Allen Large, who live in rural Nova Scotia, decided they had no need for the money and, four months after the Lotto 6-49 win, have given virtually all of it to churches, animal charities, hospitals and other groups, the Halifax Chronicle-Herald reported.

"What you've never had, you never miss," Violet Large, 78, who is recovering from cancer, told the newspaper. "We have an old house, but we're comfortable and we're happy in it."

"It made us feel good," she said about giving the money away. "And there’s so much good being done with that money."

Read the rest here.

Something tells me these people were immensely wealthy long before they hit the lottery, and are more so today.