More nonprofits means less tax revenue...

December 7, 2009

The number of tax-exempt organizations has grown 60 percent over the past 10 years, meaning a missed tax-revenue opportunity for the IRS, The New York Times reported Dec. 5 (see rise in nonprofits story). Last year, the IRS approved 99 percent of organizations that applied for tax-exempt status, which allows donors to receive a tax deduction for their donations.

Given the toll the global economic downturn has taken on its endowment, the Nobel Foundation is considering lowering the monetary prize it awards winners, Reuters reported Dec. 5 (Nobel Foundation story). The organization lost a fifth of its invested capital last year, and only some of that has been recouped during the recent market recovery.

While the economic downturn has dampened giving, many wealthy donors remain active, although they now are demanding more interaction with recipient charities, more transparency and a return on their "investments," The Wall Street Journal reported Dec. 4 (see trends in philanthropy story). Many see this trend in "venture philanthropy" moving to European giving as well.

Reminiscent of its corporate parent, the Bill & Melinda Gates Foundation is working to spur innovation and measurable results in its grantmaking, Business Week reported Dec.4 (see Microsoft philanthropy story). The new CEO of the foundation is encouraging employees to make "big bets" on innovations that one day could bring about fundamental improvements in areas like malaria and tuberculosis.

Wall Street bankers should learn from the lessons of Carnegie and Rockefeller, who donated vast sums to charity, in part to overcome their reputations as greedy tycoons, Joyce Appleby wrote in a column in the Los Angeles Times Dec. 6 (see Wall Street philanthropy column). Wall Street should convert multi-million-dollar bonuses to charitable donations, thereby boosting society and their own corporate reputations.

A group of anonymous donors has donated $12.25 million to Gann Academy, a small Jewish day school in Waltham, Mass., to retire the school's debt, The Boston Globe reported Dec. 4 (see Jewish high school story). The school had been spending $700,000 a year to service the $15 million it borrowed to construct a building.

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