Giving Patterns of the Not So Rich But Very Famous
Phew! Once again, we made it (barely) through tax season or, as we prefer to call it in the profession, the “silly” season. Of course, the silly season in taxation is the polar opposite of the silly season in various sports and journalism, where it is perhaps more appropriately defined as the off-season when real news and action is light. By contrast in tax, the silly season is that surrealistic time right before April 15th when down is up, white is black, good is bad…well, you get the drift. It is truly the bizarro world.
So, now it is the so-called “off-season” for us. And what do tax accountants do in their off season? They become tax yentas, catching up on some light reading, like
President Barack Obama’s and
Vice President Joe Biden’s tax returns. That’s right; there is a website that is specifically devoted to providing this unvarnished data for our reading pleasure. For historical flavor, they also throw in the various tax returns of former Presidents
Bush, Clinton, Bush, Reagan, Carter, Ford, Nixon and
Roosevelt. Not to mention presidential/vice presidential wannabes like
Romney, Ryan, Gingrich, Santorum (who?),
McCain, and Palin (or is it
Fey?). The stated purpose of the
Tax History Project is “to provide scholars, policymakers, students, the media, and citizens with information about the history of American taxation.” Uh-huh. Personally, I think it just puts private information about public figures into the hands of those least able to interpret it.
Nevertheless, the takeaway…..
Our President and First Lady appear to be fairly generous donors, giving away $150,034 to charity last year. This represents just shy of 25% of their adjusted gross income ($608,611), a healthy measure by anyone’s standards. Their contributions were generally in the $1,000 to $5,000 range. The big one was to the
Fisher House Foundation ($103,871), an organization that provides temporary housing to military families who travel to be with loved ones who are receiving medical care at major military and VA medical centers. The first couple does not appear to have done anything fancy in 2012 with their charitable giving – it was all in cash, nothing in appreciated securities, and no fancy techniques were employed (CRT’s, CLT’s, private foundations, etc.).
The Vice President and Jill Biden appear to be more like the rest of America (Joe and Jill Sixpack, if you will) – their charitable contributions ($7,190) represented less than 2% of their adjusted gross income ($385,072). More sketchy on the face of it was the fact that a significant portion of their contributions were noncash donations of “clothing, books, kitchenware, glassware, furniture, exercise equipment, bicycles, toys, and pottery.” Clean out your house, take a $2,000 deduction. (But who am I to throw stones?
I gave away a car last year. )
According to The
Charities Aid Foundation World Giving Index 2012, the United States ranks # 5 in the world in terms of overall giving and # 3 over a 5 year period. Not bad, but for a competitive people, not particularly good either. (“WE ARE NUMBER 3, HEY! WE ARE NUMBER 3!”- It just doesn’t roll off your tongue too well.) The more important factoid, I think, is that the percentage of our disposable income donated to philanthropic causes has hovered for decades around 2% (
Giving US Foundation, 2011 Report). The Biden’s are almost at that pitiful level while the Obama’s blew it away. Finally, preliminary (and ridiculously late) 2010 statistics from the IRS show that people in the Obama/Biden’s income category of $250K + gave away an average of $19,651. So, it’s “Hail to the Chief” and “Boo to the Veep!”
Where does this leave us? Poking fun at politicians and celebrities is fine, but at the end of the day, charitable giving is and should not be just a “feel good” exercise. Being judgmental about it, I think giving levels in this country should be dramatically increased, especially as government spending in the social sector is curtailed. That said, I also believe that it is up to each and every one of us to do our part in a way and to the extent we feel most comfortable, and that our giving, regardless of the amount, should always be done thoughtfully and systematically. Many religions teach about tithing as an aspirational goal – giving away a minimum of 10% of your income. 10%
is a lot – but what about setting a goal that is reasonable for you and then making it happen? It could be 4%, 6%, or even 10% or more, but if you systematically make it happen each and every year, your philanthropy will become more manageable, budgetable, impactful, and ultimately more meaningful for you.