Built into the Obama Administration’s call to reduce the charitable deduction for higher earners is this:
Much more worrisome are the assumptions of the latest tax proposal and a White House initiative called the Social Innovation Fund. While the former assumes that the money diverted from charity can be put to better use by government, the latter adds the notion that government funds should themselves be directed to nonprofits, some previously independent of government. The other assumption is that private philanthropy should follow along, matching government dollars.
In combination, this amounts to what can be called the Solyndra-ization of philanthropy, in which the government would brand select social-service organizations with the Washington seal of approval, and thus signal that private charitable capital should be directed to the same organizations.
The mind boggles. Not only are they taking money out of the private sector capital markets to play their own venture capital games (see: Solyndra); but they’re also planning to do the same with non-profits. Their proposal will drain funds from non-profits of your choosing and funnel money to non-profits of their choosing.