Tax Code Should More Fairly
LAST MONTH President Obama invited former President George H.W.
Bush to the White House to honor the organization he helped
create—Points of Light—for
its extraordinary efforts to promote volunteerism and community involvement.
President Bush deserves such
recognition but it’s unfortunate
that our tax system doesn’t
fairly recognize some of the contributions of volunteers he inspired.
When volunteers use their
own car to deliver food or provide shuttle service for an ailing
elderly person, they often get
reimbursements from a charity. But if they were to be reimbursed at the federal rate of
56.5 cents per mile, they could
receive an unpleasant surprise
at tax time.
Under current law, volunteer
drivers may only receive up to
14 cents per mile before additional reimbursement is considered income and taxed alongside
their wages and salaries. On
the other hand, drivers that are
reimbursed by an employer can
be reimbursed up to the full fed-
The bill would drop
the requirement that
charities tell the IRS
about reimbursements to volunteers.
eral amount without incurring
any additional tax liability.
Such treatment discourages volunteers from driving. It’s
a double standard that doesn’t
make sense and isn’t fair. And
it can have a real effect on the
amount of time and money volunteers are willing to offer. As
far as I can tell, this distinction
is unintended, but that should
only increase the urgency of correcting a terrible mistake.
To put this in perspective,
consider this scenario. A volunteer drives 4,000 miles and
is reimbursed at the federal
standard of 56.5 cents per mile,
which would be $2,260. But at
tax-filing time, the federal tax
code exempts only $560. That
means that the volunteer’s taxable income went up by $1,700.
However, if the volunteer were
reimbursed by an employer for
the same mileage, she would
face no tax at all.
Most Americans give their
time and money out of altruism,
but right now the tax code sends
the message that such behavior
is valued less than similar activity on the job.
It doesn’t make any sense to
encourage cash gifts with a tax
break but provide a disincen-
tive to volunteers who make de-
liveries for their local Meals on
The tax code sends
the message that volunteering is valued
less than a similar
activity on the job.
consider tax changes that promote volunteerism.
Removing the disparity in the
way we tax business reimbursements and those received by volunteers would show communi-ty-minded people that their service is important and encourage
their continued efforts at making this world a better place.
U.S. Representative Tom Petri, a Republican, represents
Wisconsin’s 6th Congressional
Peter Buffett Misses the Mark With His
Critique of the ‘Charitable-Industrial Complex’
WHEN Peter Buffett took to the pages of The New York Times to lament what he calls a “crisis of
imagination” in philanthropy—
a failure to envisage a way for
our society to function that puts
an end to what he calls a “
perpetual poverty machine”—he
ignited quite a debate.
Mr. Buffett, chairman of the
NoVo Foundation and son of
Warren Buffett, criticized our
capitalist system while being
careful to emphasize that he is
not calling for an end to it.
Sitting in meetings with people who are “searching for answers with their right hand
to problems that others in the
Data suggest the
bulk of giving goes to
activities not mainly
focused on leveling
the playing field.
room have created with their
left” has left him frustrated,
he writes. So too has the phil-
anthropic ignorance that leads
to unintended and negative
consequences; a nonprofit sec-
tor and accompanying “chari-
table-industrial complex” that
he says has become a “massive
business” and led to the creation
of countless “gatherings, work-
shops and affinity groups;” and
an over-reliance on “business
principles” that simply “feed the
Like many others, I have real
critiques of Mr. Buffett’s op-ed,
but I also think that he makes
some important points that we
should not dismiss too quickly
(and judging by some of what I
read, I worry that we may).
First, my criticisms: I question his understanding of the
nonprofit world and where philanthropy money goes. He creates the misimpression that philanthropy has grown relative to
business and government, when
that is not really the case.
As Tom Watson, founder of
the CauseWired consulting
firm, noted on the Forbes site,
“While it’s true that the num-
bers of nonprofits have grown
rapidly (as have foundations),
philanthropy today represents
roughly 2 percent of GDP—and
has been stagnant at that level
since roughly 1970.”
He cites the $316-billion giv-
en in 2012 (without acknowl-
edging that this remains below
the 2007 peak) and writes that
“philanthropy has become the
‘it’ vehicle to level the playing
But the data suggest that the
bulk of that giving goes to ac-
tivities not primarily focused on
leveling the playing field: Yes,
some of the dollars directed to
religious and educational insti-
tutions—the two biggest pieces
of the pie—might be allocated to
alleviate poverty or create up-
ward mobility, but much is not.
Philanthropy is at its
best when it solves
and government will
not or cannot.
that, I suppose, the organization
I lead is very much a part of.
The fact is, if we care about
making progress on our most
pressing social problems, then
we need foundations and non-profits to be effective.
There is a role in this effort
for data about what works (and
in what contexts); for bringing
the views of those on the ground
(grantees and beneficiaries)
to decision-makers; for performance assessment that is rigorous and thoughtful; and even
(gasp) for meetings among those
who might learn from each other.
Yes, we need to ask the big
questions about how our society functions and about the role
and limits of markets. But we
also need to focus on making
the philanthropy that is going
on today, and each and every
day, as effective as it can be.
Phil Buchanan, a regular
Chronicle columnist, is president of the Center for Effective