Tasting Philanthropy
Multiple reasons explain why America is the most charitable nation on earth. Some people attribute this ranking to the claim we Americans are the most religious of any leading modern economy. Others base it on the rugged sense of entrepreneurialism and a belief in an individual’s ability to make a difference. Still others give credit to the fact that charitable giving is imbedded in the nation’s business culture. There is no question taxes play a part: state and federal governments allow taxable income to be reduced by charitable donations.
This year the tax incentives are further sweetened by a law that allows people to convert their regular individual retirement accounts into Roth IRAs. Regular IRAs grow tax free until withdrawn. But Roth IRAs are made with after-tax savings so the invested contributions grow without taxes. And they aren’t subject to the same minimum distribution requirements as traditional IRAs from which withdrawals must begin at age 70 ½. In 2010, people whose incomes exceed $100,000 (and too high to qualify for Roth IRAs) have a three year window to pay taxes due on the conversion. This year alone, in other words, they have the option of spreading the taxes between now and 2012. Some donors can be particularly creative by establishing a charitable gift annuity to save estate heirs from the taxes on inherited financial assets. Some argue there are at least two additional reasons to move invested savings at this time into a Roth account: 1) investors may not have fully recovered in 2009 from the paper losses of the stock market’s decline in 2008 and therefore will pay lower taxes upon a conversion now; and 2) the future tax rate, both at the federal and state levels, is likely to be higher than it is today because of the large, looming deficits that must ultimately be funded by taxpayers.
However, my point is not to give a tutorial in personal finance and investment management. Despite the tax incentives described above, it is citizens who occupy the lowest income quintile in this country who give the highest percentage to charity. The poorest are the most charitable. Evidence of such generosity is obvious in the monies raised for Haiti relief in the face of that country’s disastrous earthquake: over a half billion dollars have been given by Americans to that tiny nation, largely from $5, $10, and $20 donations on web sites, at retail checkouts, and even on personal cell phones.
Organizations like the National Association For Continence rely on this same kind of individual generosity. Public health education and patient advocacy happen in America because you care and you give. We are a not for profit association established for the people and by the people. To learn more about our mission, our programs and our outreach, visit www.nafc.org Visit every site represented here at HealthCentral, seeking to bring you clinician-reviewed, timely content on dozens of health conditions and diseases. We flourish and serve communities because of support from you.
