“From the proposed decrease in the charitable tax deduction to greater government intrusion into the operation of private foundations, there are numerous ways in which philanthropic freedom is now in jeopardy.” — Jeffrey Cain, Ph.D.

The beneficiaries of American charity and generosity are widespread—disaster relief funds have saved residents of Sri Lanka and Haiti, and America’s AIDS initiatives have benefited many, especially in African countries. But the benefits are even greater at home.  Because of our proclivity towards charity and civic action, American society is a more cultured, wealthier, and more equitable society.  Alexis de Tocqueville noted this when he visited America in 1831, and it has remained true in the present day.

Unfortunately, the very freedoms that have allowed American philanthropy to flourish are now under attack.  In a just-released Washington Legal Foundation Legal Backgrounder titled, Five Threats To Philanthropic Freedom In These Recessionary Times, Jeffrey Cain, President of the Arthur N. Rupe Foundation, examines the increasingly hostile environment for charitable foundations, and chronicles specific efforts that, if successful, will likely cripple the philanthropic sector.

One potential assailant of American philanthropy is the government.  Both at the federal and state levels, governments are strapped for cash.  Already, some politicians are pointing to foundations and charitable institutions as the golden geese that can help the government pay off its debts.  One federal proposal suggests eliminating the tax-advantages given to private foundations—as cited in a recent report, “Senate aides are quietly exploring ways to tax the massive wealth tucked away in charitable foundations.”

Another proposal—this one initiated by the President himself—is to reduce the tax deduction rate, especially for the wealthy who give generously to foundations other and nonprofits.  This proposal, which would significantly discourage charitable giving, has been mimicked at the state level.

American philanthropy is also threatened by the specter of increased regulation through identity politics.  A number of organizations, including the National Committee on Responsive Philanthropy (NCRP), have complained that private charitable foundations are not doing enough to serve disadvantaged populations.  These foundations, activists argue, should be more closely regulated by the government, and should be forced to conform to certain governmentally-defined parameters regarding the distribution of their funds.  This assault on freedom is a central point in a soon-to-published WLF Conversations With paper on philanthropy moderated by The Honorable Dick Thornburgh and featuring Adam Meyerson, Heather Higgins, and Dr. Larry Arnn.

If any of the measures Mr. Cain’s paper discusses make headway, the American philanthropic community is certain to be less wealthy and less free, an effect that would hurt the country and the world.