At this time of the year, many people open their wallets to charitable causes. Not only are Americans the most charitable people on Earth, but private charitable giving is also part of the American fabric as an exercise of our First Amendment rights.

Everyone loves the party game/icebreaker “two truths and a lie.” Can you identify which of the following is NOT true about charitable giving? 

A. Charitable giving isn’t just about money but affects lives and changes society as well.
B. Forced public disclosure of donor lists will discourage broad-based civic participation.
C. Tax policy doesn’t affect charitable giving. 

Let’s take these statements one at a time:

A. TRUE! While many people only think about the amount of money given to one cause or another in a given year, charitable giving should be measured by the impact it makes. In the field of medicine alone, private philanthropy has led to breakthrough advances including the polio vaccine, kidney transplants and dialysis, insulin, and successes in the fight against cancer. 

Charitable giving has led to similar advancements in education, the preservation of nature, public policy, and culture, helping people to protect the beauty of the earth that we enjoy while also refocusing our efforts on people. Work by educational organizations such as IWF helps to influence policymakers and effect change in our cities, states, and nation. 

B. TRUE! The notion of releasing donor information has gained support recently, especially as public opinion has become more polarized on different issues. But forced public disclosure of donor lists will open a Pandora’s box, only furthering the political segregation in our nation. 

Some donors may wish for their gifts to be publicly known, and there are many ways to ensure that. But denying anonymity to all donors will discourage many donors, exposing them to potential harassment, retaliation, unwanted solicitations, boycotting, and physical harm. Beyond the backlash that may follow a donation, others may wish to remain anonymous for religious reasons. Without anonymity, the scourge of a true democracy may fall upon us, with the minority being overpowered by the majority. In the U.S., however, we have protected donor privacy and free speech through our Constitution, as affirmed by the Supreme Court in NAACP v. Alabama over sixty years ago and Americans for Prosperity Foundation v. Bonta just a couple of years ago.

As abhorrent as some unpopular opinions may be, we must champion this right to protect future movements whose importance we may not recognize for some time. Imagine if women’s suffrage had been silenced through donor disclosure.

C. FALSE! Tax policy can have wide-reaching effects on private philanthropy. The charitable deduction encourages giving. Low tax rates make the economy strong and increase the amount of money Americans can afford to donate. These policies can help to cement the bond between the private and public sectors without conflating the two. 

Some individuals are motivated by religion or philanthropy and will give regardless of the tax benefits. But this does not mean that policymakers should take away tax benefits. Without the support of those who are at least partially motivated by the tax benefits, charities and non-profits will suffer. 

Bottom Line:

This year, many Americans are suffering due to the high rates of inflation and an uncertain future ahead. Even so, we should remember those who came before us and helped to form our nation’s values and culture. Without a prosperous nation molded by an opportunity economy, we could not share this prosperity with others and the causes that we believe in.