Friday, December 28, 2012

Do Tote Bags or Charitable Deductions Encourage Giving?

Here's yesterday's installment of The Daily Stat from the Harvard Business Review:

DECEMBER 27, 2012
Why You Don't Like Donating to Charities That Offer Thank-You Gifts

Research participants were willing to donate 38% less, on average, to public broadcasting if the U.S. nonprofit offered a thank-you gift, in this case a pen, say George E. Newman and Y. Jeremy Shen of Yale University. A promised gift of a tote bag brought intended donations down 17%. A thank-you gift creates ambiguity in the donor's mind about whether the donation is supporting the charity or is a quid-pro-quo, the researchers say.

Source: The counterintuitive effects of thank-you gifts on charitable giving
















Frankly, thank you gifts have never enticed me to make a contribution to a not-for-profit organization.

In fact, they act as a reverse incentive on me, making it less likely that I will give.

Rightly or wrongly, I have a visceral reaction that goes something like this: If they can afford to give me something for my contribution, maybe they don't need my money. Maybe, I think, they could save a few bucks and lower their cost of operation by not buying thank you gifts.

Now, I'm sure that at least some of the thank you gifts offered by not-for-profits are donated by corporate sponsors who, in turn, are able to write the donations off on their taxes.

But that raises another issue. Even though taxpayers, individual or corporate, would be crazy not to take advantage of the charitable deduction of our tax laws, I'm not a fan. There are several reasons for this.

First, there's a matter of principle: I think that giving ought to be based on genuine commitment. I give to my church because I believe in the mission off the Church to make disciples for Jesus Christ. I give to other not-for-profits because I believe in what they're doing, not because I get a tax write-off.

Second, I don't think it's right for the taxpayers of the United States to effectively subsidize my charitable contributions or the charities I support. I believe that every taxpayer should expect to put her or his money where their commitments.

Third, and this is in a way my most serious concern, I stew about the possibility of coercion from some governmental entities over charities that have become dependent on the charitable deduction used by their benefactors.

For example, in some European countries, churches are still affiliated with the state. Pastors of the official state churches are, in effect, government employees. As Western culture comes increasingly to reject the very notion of sin, some clergy are being charged with "hate speech" for implying that there are, as I believe is revealed in the Bible, objective standards of right and wrong from God.

We have no official state churches in the United States, thank God. But with shifting mores, what might happen to the giving of congregations whose not-for-profit status is revoked for speaking God's truth in love to a culture that increasingly views truth as a pliant and personal thing? Would those who give to their local church be inclined to give less because they could no longer get a charitable deduction on their income taxes?

Maybe. In any case, I prefer that the possibility of such leveraging over the missions of churches and all other not-for-profit organizations didn't exist.

In 1 Corinthians 9:15, in the New Testament portion of the Bible, the apostle Paul says to a group of first-century Christians: "Each of you must give as you have made up your mind, not reluctantly or under compulsion, for God loves a cheerful giver."

Thank yous are nice, though unnecessary for the committed giver. But thank you gifts are utterly superfluous, cheapening the entire transaction.

And, I will keep taking my charitable deduction each year. I'm not nuts. But I wouldn't shed any tears if this provision of our tax laws went away either.

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