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The social and economic value of philanthropy

After the debates about debt and deficit reduction, it is abundantly clear that government is broke and broken. To create America’s future, we need to engage new partners.

How? America’s tradition of charitable giving of all types supports our communities. But most important, we need to recognize that philanthropy is an independent, innovative investment in building community.

With more than 1,300 foundations in the state and nearly $475 million in grants in 2009, philanthropy in Wisconsin is creating opportunities and a better quality of life. Recently, we joined together at the Janesville Performing Arts Center to talk about philanthropy’s role in building our future.

For example, the Community Foundation of Southern Wisconsin has partnered with ECHO and the Janesville Farmers Market to feed low-income families. This year, the Community Foundation has leveraged $18,000 for the Farmers Market Coupon Program to provide hundreds of ECHO families with fresh, locally grown produce—and simultaneously add to Janesville’s local economy.

That’s what philanthropy is about. We ask a lot of the nonprofit sector, providing critical support to families in need. But philanthropy doesn’t respond to symptoms. Rather it addresses the underlying systems change.

In today’s environment, the Council on Foundations’ legislative agenda focuses on helping philanthropy do even more in America’s communities. This year, Congress has three key opportunities to protect and strengthen philanthropy:

Protect the charitable deduction: A federal proposal to limit the charitable deduction for certain Americans as a means to reduce the federal budget deficit is shortsighted. While citizens across the ideological spectrum can debate the role of government, consensus suggests independent contributions can make a key difference in creating positive social change—especially at a time of dramatic cuts in government at the federal, state, and local levels. We don’t see ourselves as just another special interest. Rather, we are partners in advancing progress and prosperity.

Foster more giving: Two proposals in the U.S. Senate would promote charitable giving. First, the extension of the Individual Retirement Account (IRA) charitable rollover would allow increased giving, most notably through donor-advised funds to organizations such as community foundations. Second, simplifying the excise tax would make sure private foundations aren’t penalized for giving more, particularly in times of great need.

Promote rural philanthropy: Finally, the Rural Philanthropy Growth Act will be introduced in Congress this spring. It would encourage the Department of Agriculture’s Office of Rural Development to use some of its existing resources to capitalize on opportunities to invest in rural economic and social vitality, primarily by helping communities build their capacity to establish and strengthen rural community foundations.

For generations, philanthropy’s investments have fostered innovation and made a lasting social and economic impact in countless communities. As Wisconsin Rep. Paul Ryan says, reclaiming the American Dream is possible if we act now.

But we’re running out of time. Philanthropy’s continued success depends on laws and regulations that advance—not inhibit—our sector’s work. We hope Congress will join us in enabling philanthropy to remain a vital partner in building America’s future.

Steve Gunderson is president and CEO of the Council on Foundations (www.cof.org). He also served in the Wisconsin State Assembly from 1975 to 1979 and represented Wisconsin’s 3rd congressional district in the House of Representatives from 1981 to 1997. Sue Conley is executive director of the Community Foundation of Southern Wisconsin (www.cfsw.org).