Comments on: Congress Wants You To Give To Haiti. But Just Haiti.

By: Charitable Donations for Haiti Tallied | taxgirl

Charitable Donations for Haiti Tallied | taxgirl — Mon, 12 Jul 2010 12:27:19 +0000

[...] 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. [...]

By: Ethics of Haitian Relief « Melih's Thoughts

Ethics of Haitian Relief « Melih's Thoughts — Tue, 02 Feb 2010 07:03:21 +0000

[...] deductions against the past year even though the tragedy happened this year. Here is a link to the post, and an excerpt: Less than two weeks after the earthquake, on January 22, 2010, Congress pushed [...]

By: Robert Young

Robert Young — Thu, 28 Jan 2010 14:28:00 +0000

You are correct on tax policy. It makes little sense to prefer some causes over others. From the perspective of political policy, however, it is a way to bring assistance quickly to a problem without spending money directly out of the Treasury. Sure, tax revenues will go down as a result of the deduction, so it affects fiscal policy, but it seems less like spending money out of the budget and having a political debate about where the revenue comes from to pay for this aid. In a way, it is an incentive to direct empowerment of the taxpayer to choose where to make their donation. It will take a lot more than a change of control (Democrat or Republican) in Washington to end this game.

By: Congress Wants You To Give To Haiti. But Just Haiti. | taxgirl | HAITI BREAKING NEWS

Wed, 27 Jan 2010 01:57:36 +0000

[...] Go here to see the original: Congress Wants You To Give To Haiti. But Just Haiti. | taxgirl [...]

By: ThomasT

ThomasT — Tue, 26 Jan 2010 23:26:48 +0000

There are a couple of differences with both the tsunami and the earthquake: both happened right at the beginning (or in the case of the tsunami, days before) the beginning of the calendar year, so there is a reasonable argument to be made that taxpayers couldn’t have seriously considered giving to these efforts in their year-end giving in the same way they could have considered/did consider the other issues you mentioned. By extending the deductability into the previous tax year, there is perhaps an incremental impact on the giving, though I think you’re right to point out that it’s probably minimal.

It’s also true that with the exception of hunger relief, giving to these causes will save/improve lives right now, while disease research funding and issue advocacy are much more speculative causes to support.

However, I’m curious what benefit the taxpayers really receive from this, and what the federal expense is. It’s just moving the deductability from one tax year to another, right? From the federal expense perspective, it’s minimal expense for minimal gain, which makes the political motivations much more prominent in legislators’ minds.

By: Tweets that mention Congress Wants You To Give To Haiti. But Just Haiti. | taxgirl -- Topsy.com

Tue, 26 Jan 2010 21:31:13 +0000

[...] This post was mentioned on Twitter by Kelly Phillips Erb, Mike Piper, Cathy Gellis, Erin Kathleen Peters, Mike Emeigh and others. Mike Emeigh said: From @taxgirl, asking a good question – why just Haiti? http://bit.ly/ckSu17 [...]

By: Kelly

Kelly — Tue, 26 Jan 2010 18:43:58 +0000

That’s a great question. If you contribute to a general fund, a charity may use your gift for any purpose. If you specifically earmark the gift yourself (this happens at a lot of smaller organizations), then the organization must use your donation for the purpose that you designate.
With respect to Red Cross, you can do that on their website by clicking “Haiti Relief and Development” when you make a donation. Otherwise, the Red Cross does not generally earmark unless specifically advised. This was one of the biggest criticisms of the organization, post 9/11. In their defense, this is the way that most nonprofit organizations operate.
As to the deductibility, the IRS has indicated, “The contributions must be made specifically for the relief of victims in areas affected by the Jan. 12 earthquake in Haiti.” That implies to me that you should earmark the gift, either on the web site or via text for it to “count” for the special rules. However, I don’t know how hard nosed the IRS will really be about this with respect to larger, well known organizations like Red Cross with massive relief efforts in Haiti.

By: Cathy

Cathy — Tue, 26 Jan 2010 17:56:35 +0000

I have a question about earmarking… Does the donation have to be earmarked for Haiti? I saw someone on twitter complain that they wouldn’t donate to the Red Cross because they wouldn’t earmark for Haiti, so they donated to Medicins Sans Frontiers instead (I might have that backward, but you’ll see where I’m going). Can the tax deductibility apply if you give to a qualified Haiti relief charity, even if it’s not earmarked for Haiti? So if the Red Cross is the example, they do a lot of important work in lots of places. I would rather support them broadly so that they can allocate their resources however they think best. But because they are a Haiti relief organization, would that count for the deduction?

(PS: I ask this question out of academic curiosity. Not seeking legal advice!)

By: J. Summers

J. Summers — Tue, 26 Jan 2010 17:05:29 +0000

Maybe it encourages “major” donors to make larger donations for “their” own benefit, and ditto on Will’s comments. It’s good PR for corporate types without the bite. It also seems they can concentrate the money coming in to a particular timeframe so that charitable organizations helping in Haiti can expect a certain amount of capital inflow to determine how to distribute the resources in the best way.

By: Will

Will — Tue, 26 Jan 2010 16:22:24 +0000

Your confusion seems to stem from a belief that Congress only enacts tax legislation for reasons of sound tax policy or social incentives. Neither appears relevant in this case, as Congress is most likely acting out of a political motive. Haiti is a global tragedy that the country is clearly concerned about (based on pervasive news coverage and very generous donations). The tax incentive provides Congress with an opportunity to score several political points: 1) They are caring and concerned individuals and therefore good people; 2) they are capable of responding to tragedy by taking some kind of action; 3) they are in touch with what is going on with the world and want to “help” citizens who are concerned with this issue. Each of these provide political points to an institution that regular polling shows American’s believe is full of corrupt, irresponsible individuals who can’t get anything accomplished. Now it remains debatable whether the Haiti tax credit successfully wins these political points or whether Congress should abuse the tax code to score political points (although even a cursory review of the Code will show that they clearly do often) but it isn’t that confusing to see why politicians would attempt to exploit this tragedy for political gain by passing legislation that doesn’t make for sound policy but makes for good politics.