How to cause a ruckus - IC2007 Phil Angelides

In the philanthropy world the way to get attention it to suggest changing how foundations are taxed. For proof, see the comments on my earlier post, which decry my lack of understanding of endowments (I beg to differ) and others ignore my point about aligning investing policies and damn it for being a call for more taxes. The post got picked up by the Chronicle of Philanthropy and the Council on Foundations - now you know, want to get their attention? Mention taxes. Unfortunately, taxes were the means of the post, not the ends.

Since the panelists at the Investors Circle conference just put forward a powerful call for us (investors in society) to recognize that economic growth is not always possible or desirable and named the truth that no politician or economist will speak (negative growth is in our future), I know I won't be alone in getting angry, reactionary comments that pick up on single grains in a comment and ignore their larger points.

The point of philanthropy should be the application of private resources for public benefit. The point of tax structures to encourage philanthropy should be ensuring that public benefit, not simply encouraging the private "magnanimity." I said nothing about taking tax breaks from donors for for setting up endowments (although my anonymous commentators didn't seem to read the post that carefully). But inuring these endowments from taxes (with the exception of 2% on private endowments) in perpetuity, when the vast majority of these financial resources are used only as fodder for commercial capital markets amounts to a public subsidy for the investment management industry.

So lets get a conversation going on my point - how can we create incentives to get greater philanthropic use of philanthropic resources?

Gotta go - Phil Angelides, who turned pension plans into a major force for social good - is about to speak. Lets see who he can piss off by speaking some truth.

Tags: philanthropy, alignedinvesting, ic2007