Raising taxes--as planned for next year, if President Obama has his way--will likely lead to a continued decline in charitable giving. The poor economy of the last two years already is taking its toll on non-profits that count on donations.
The Chronicle of Philanthropy today reports that the top 400 charities in America experienced an 11 percent decline in contributions for 2009.
As an indication of how stock drops can hurt charity, the Fidelity Charitable Gift Fund plummeted 40.3 percent in 2009, according to the report.
On the other hand, some charities experienced an increase, perhaps attributable to those with jobs trying to help out more in hard times. Something similar happened in the early days of the Depression. Catholic Charities, for example, rose an impressive 60 percent. World Vision and AmeriCares both posted gains.
The economy is a bit better in 2010 and the charitable sector therefore may stabilize or show a tiny gain this year (the Chronicles report sees a possible 1.6 percent rise). But if taxes go up as planned in 2011--the income tax, the capital gains tax, the Estate Tax, and state and local taxes and fees--you can probably expect a further belt-tightening.
For me, the implication is clear: money the government gets will come partly at the expense of private philanthropy.