RichmondLeaders.com: News & Opinions by and for the Leaders of Richmond

(Editor’s note: This appears in the April 16 edition of Style Weekly. Reprinted with permission. www.styleweekly.com).
The prevailing view is that were it not for high tax rates, people would not give. I respectfully disagree with this consensus view. Every day at The Community Foundation (www.tcfrichmond.org), I witness first-hand the passion that accompanies people’s desire to give.
Consider just three of the 65 donors who set up new charitable funds with us last year. One donor last year set up a memorial fund to provide care for child patients with chromosome disorders. Another donor is helping needy children receive dental care. Yet another thanked the doctor who saved his life by setting up a fund that allows the doctor to choose where the grants will do the most good.
Do you really think these people were primarily motivated by saving taxes?
How about the many donors who set up scholarship funds as memorials to their loved ones? Or, tell me if you detect a tax motivation for our donor who set up a fund last year to enhance the environment and quality of life of our region through projects that encourage energy, soil, water and land development conservation, as well as initiatives to improve air quality?
Who among you thought a second about taxes when you gave to the Bryan and Kathryn Harvey Memorial Endowment to remember the Harvey family? Hundreds of people nationwide felt compelled “to do something” and made gifts large and small. A third grade class donated proceeds from their homemade craft fair. A local restaurant contributed a portion of their sales for a day. An anonymous donor offered a $12,500 matching grant, which was met in a matter of just a few weeks. Fundraisers for the Harveys’ endowment fund have included walks, concerts, festivals and record sales.
Taxes didn’t figure into that equation. The donors were motivated to keep the Harvey family’s spirit alive, which we now witness through the Endowment’s grants that have enabled City of Richmond school children to “come and play” with the Richmond Symphony (www.richmondsymphony.com), enhanced the new backyard garden at The Children’s Museum of Richmond (www.c-mor.org) and helped children heal from the loss of a loved one through music and the arts at Comfort Zone Camp (www.comfortzonecamp.org).
Or, consider whether taxes have inspired donors to give to the Theatre Artist Fund of Greater Richmond, established by Phil Whiteway and Bruce Miller of Theatre IV (www.theatreiv.org) in partnership with Michael Gooding of the Richmond Alliance of Professional Theatres (”RAPT”). Theatre artists don’t make a lot of money for their work, and this fund provides emergency financial assistance to those who have demonstrated a commitment to live theatre in Greater Richmond and who have experienced an exceptional financial need related to a specific crisis beyond their control. Theatres throughout the region have collected donations for this fund.
No, I do not believe that people give to avoid taxes. I hear donors in their 80’s and 90’s say that their children are well established, and that they want to give something back to their community. I hear donors say they want their children to learn the value of hard work, and they decline to make them independently wealthy. I hear donors talk about tithing.
Yes, people are tax-wise in the way they give. Why not let Uncle Sam make part of your gift through tax savings? Donors give appreciated securities to avoid the capital gains tax. They make a variety of planned gifts to receive income during their lifetimes, after which the remainder value passes to charity free of estate tax. Donors make charities the beneficiary of their IRA, which will be heavily taxed (up to 80%) if left to heirs.
However, if people give to avoid taxes, then why has giving exploded in recent years, despite lower tax rates?
While we are challenging the consensus, why not take on the popular press which loves to bash our local governmental leaders? Have they really been such bad partners? Consider Virginia’s investments in our state agency museums – the Virginia Museum of Fine Arts (www.vmfa.state.va.us) and the Science Museum of Virginia (www.smv.org) – and our state university, Virginia Commonwealth University (www.vcu.edu) . Consider the investment of the City of Richmond and surrounding counties in Maymont (www.maymont.org). And, yes, consider the City of Richmond’s and the State’s investments in the Virginia Center for the Performing Arts (www.richmondcenterstage.com).
To be sure, many cultural opportunities go unfunded and those which are funded require a lot of effort. However, the net result of our private and public investment in cultural institutions is astounding for a city our size. We have two well-endowed universities, a phenomenal array of cultural attractions and a community foundation that ranks19th in asset size nationally.
Critics will undoubtedly continue to rationalize their view that raising taxes will increase both government revenues and charitable giving. At least in the latter case, and arguably in the former as well, it is simply not true.