From the Arbor | News for December from Jerry Weakley

Snow on Taft Bridge

Through the years I have intentionally only on special occasions used the Arbor for anything that would approach a fund-raising piece. The intent of the Arbor has always been, and will remain while I write and edit it, a communication tool to inform, perhaps entertain and further engage you with the University. That being said, I feel it is important here at the end of 2012 and in the face of potentially detrimental legislation to present information not only in favor of financially supporting this institution but also in favor of supporting philanthropy in general.

As you will read inside this issue, the “fiscal cliff,” which is so much in the daily press, has wide implications for Baker and indeed for all charities. While I address some of that in the article, I feel like I need to include on this opening page additional talking points our leadership at Council for Advancement and Support of Education (CASE) has developed to help people who wish to contact their congressional representatives supporting the retention of the tax advantages that support philanthropy. Here are some of those main points:

  • Charitable donations help colleges and universities achieve their teaching, research and public service missions. According to the Council for Aid to Education’s Voluntary Support of Education (VSE) survey, donors contributed about $30 billion to higher education in 2011.
  • As the climate for giving to education has improved, the VSE Survey found that giving to colleges and universities increased by 8.2 percent over the previous year. Adjusted for inflation, giving to higher education actually rose 4.8 percent.
  • As federal and state governments continue to cut funding for higher education, raising private support from individuals has become even more crucial for colleges and universities.
  • Proposals that would cap or reduce the value of the charitable deduction for certain donors or eliminate the deduction altogether represent a step in the wrong direction. As colleges, universities and independent schools struggle to meet increased demands for their services with shrinking resources, we need to encourage all individuals, regardless of income and wealth, to give to charity.
  • According to the 2012 Bank of America Study on High Net-Worth Philanthropy, high net-worth households (household income greater than $200,000 and/or net worth of at least $1 million) account for around $105 billion of the $210 billion given by individuals in 2011. These are the taxpayers who have the resources to give to charitable causes consistently, and U.S. tax policy should encourage them to continue to give generously.
  • Donors would likely adjust their giving levels if a cap is enacted, leading to lower levels of giving. Ultimately, those served by charitable organizations would feel the brunt of this policy change.
  • Declines in charitable giving during the Great Recession were concentrated at the top of the income scale. A recent study by The Sharpe Group found that while taxpayers with incomes below $200,000 reduced itemized gifts by 4 percent from 2007-2009, taxpayers with incomes over $200,000 reduced itemized gifts by 34 percent during the same time period.
  • Studies indicate that donors give for many reasons and incentives. Tax deductions are certainly among those. While donors would continue to give if the charitable deduction is reduced or eliminated, it will likely affect the timing and more importantly, the size of their gifts.
  • The charitable deduction is unlike other itemized deductions because it encourages people to voluntarily give away their money for the benefit of others. If anything, incentives for this type of behavior should be enhanced, not limited.

Thanks for this chance to bring this critical information to your attention. I think at this traditional time of giving, it is appropriate. If you care to contact your own representatives, it will be greatly appreciated not only here at Baker but also across the country by our sister institutions of higher learning and indeed, charities and social service agencies of every conceivable nature.

I hope as you enter this Christmas season that you will be able to find a few unrushed moments in which to sit quietly and enjoy family, friends, all the good things you enjoy in your life and, perhaps, even this issue of the Arbor.

If by chance you know of someone who is not receiving the Arbor, forward their email to me at jerry.weakley@bakerU.edu and I will get them on the list for next year.

Access the current issue of the Arbor. I hope you will find something in it that will inform, entertain or further engage you with our University! There are lots of opportunities to respond . . . and I hope you will!

Merry Christmas and Happy New Year!

Jerry Weakley, ’70, MBA ’92

Categories: Arbor, News


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