Guest Author: Don Wong Jr. is a serial entrepreneur focused on telecommunications and real estate development. He previously served as Vice President for the Asian Pacific Fund, a community foundation serving the needs of Bay Area residents.
To answer that question, it's helpful to see "Where the Money Has Gone". A recent article in the New York Times "Age of Riches" Series entitled "Big Gifts, Tax Breaks and a Debate on Charity" piqued my interest.
The chart accompanying the article reveals that, "Since 2002, most of the money donated by wealthy individuals has gone to universities or private foundations," followed by health and the arts. Not too surprising.
Various donors describe how they prioritize their gift recipients while others comment that these gifts often do little to help the poor in this country: "Research shows that less than 10 percent of the money Americans give to charity addresses basic human needs, like sheltering the homeless, feeding the hungry and caring for the indigent sick, and that the wealthiest typically devote an even smaller portion of their giving to such causes than everyone else."
What really struck me was that these large charitable gifts are accompanied by significant tax breaks that have equally significant implications on taxes collected by the federal government. The Tax Code "offers the wealthy better tax breaks for charitable giving than it does the average taxpayer. Deductions for charitable giving can be claimed only by the fewer than half of all taxpayers who itemize, and those falling in higher tax brackets get bigger deductions for cash gifts.
"The charitable deduction costs the government $40 billion in lost tax revenue last year, according to the Joint Committee on Taxation, more than the government spends altogether on managing public lands, protecting the environment and developing new energy sources."
Many of Asian American Giving readers are familiar with the predicted $41 Trillion Wealth Transfer over the next several decades.
The focus of many donor development and planned giving officers is to help their nonprofits tap into that enormous transfer of wealth.
How does knowing "Where the Money Has Gone" inform your approach to raising support as a charity (especially those that exist to serve basic needs), or to serving your clients as a trusted adviser (helping to fulfill their charitable intent)? Please leave a comment and share your thoughts.
About the author: Don Wong Jr. is the Founder and Managing Member of David Ltd., a real estate development consulting firm providing real estate development services to major wireless communications companies. Prior to starting David Ltd., he served as in-house counsel to one of the national carriers and was a management consultant. Don is a member of the State Bar of California and a California Real Estate Broker.
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