This article from ThirdSector discusses a new concept in Britain to help channel more money to those that need it. This solution addresses a growing concern in the United States as well that lower-income populations are not being served well by nonprofits.

Call to give philanthropists tax breaks when they donate to poor areas

Major donors should pay less tax if they make donations to charities based in disadvantaged regions, according to the Community Foundation Network.
The network represents charities that support local communities. The recommendation is one of 29 made in its Manifesto for Community Philanthropists, published this week.

The manifesto proposes the creation of ‘special giving zones’, modelled on social exclusion zones, that would encourage investment in services to disadvantaged communities. Any individual or company giving to charities that work in these zones would get favourable tax treatment.

Other recommendations include the creation of bank-gifting accounts to simplify giving and a £30m philanthropy infrastructure investment fund to help smaller charities set up online donation systems.

Stephen Hammersley, chief executive of the network, said the manifesto was drawn up to promote grassroots giving. “Community charities need to receive independent and sustained funding,” he said. “The manifesto is an exploration of possible ways they can achieve that.”

I find this quite disturbing for a number of reasons.

First, given the monumental financial malfeasance wrought by the financial sector, the palty sums were elevated to front page status bring a negative light to a sector that comprises 10% of the GDP. This coverage failed to provide any context for the amounts and thus conveys a negative impression of the entire nonprofit community.

Secondly, as admitted in the story, most contributions were in the form of tickets to events, not directly to campaigns, with no pro quid pro expected. These types of donations were not given with malicious intent. While explicitly stating this, the tone of the article harms the reputation of hard-working organizations doing the public good.

If we were to look at this issue clearly, we would see that is unfair to restrict nonprofits’ ability to contribute because of their nonprofit status while businesses that receive tax breaks and other preferential treatment from government have no such restrictions.

In fact, is the nonprofit sector that is effectively doing the government’s job of providing essential social services and a safety net, largely on private funds. If anything, nonprofits should have more of a say in how the government operates, specifically, on budget issues in which it ends up bearing the brunt of the burden as social services are slashed. Instead, businesses are allowed to lobby to receive tax breaks and other incentives while flouting financial, health, environmental and worker safety laws. Clearly, a double standard is in place.

WAKE UP CALL: It is time for fair coverage and representation of the nonprofit sector in the media and halls of government. Nonprofits, now is the time to speak up!