It has been a grim year for most charitable organizations over the past two years. Giving has been down markedly, with gifts in 2008 representing the largest dip in charitable giving (-5.7%) in more than five decades.
That’s why the total amount of donations made to various relief agencies in Haiti is fairly mind-boggling. According to the Chronicle of Philanthropy, US relief organizations have raised $1.3 billion in donations since a number of earthquakes and aftershocks rocked the island nation of Haiti, displacing or injuring an estimated 3 million people. The total amount of donations was just a bit shy of the pre-recession tsunami donations about five years ago.
Even before the earthquakes, Haiti was a fairly poor country. The amount raised in charitable donations in 2010 equals about 20% of Haiti’s annual GDP. To put that into perspective, charitable contributions would have to total nearly $3 trillion to make up 20% of the US’ annual GDP – more than 2,000 times as much.
While it’s true that Americans tend to be a fairly generous people, the uptick in donations to Haiti were likely spurred by the special tax considerations given for donations. I asked the question then – and I wonder the same thing now – whether that made sense. Is it smart (or fair) to drive donations to one particular relief effort? Should we pass a similar rule to promote donations for the Gulf?
I get that it happened in January and that Haiti is a poor nation. And I’m not quibbling with the need for donations (I donated). I just happen to hate the piecemeal method of putting together our laws. We’re so… reactionary and yet still so short-sighted.
If Congress *really* wanted to give taxpayers incentives to be charitable, they’d scrap the “special” rules and simply make charitable donations available for all taxpayers whether or not they itemize. An above-the-line deduction for all qualified charitable gifts. What do you think?