Hello Classmates,
Recently, the topic of fundraising has been of interest to me especially in larger organizations as we look into how non-profits operate. It is true that fundraising is imperative to keep non-profits' doors open, and that the majority of the funds come from corporate/government grants, and charitable contributions by donors. The discussion I would like to raise is that of using incentive's to boost the effectiveness of fundraising to achieve monetary goals whether it is an ethical approach to use by organizations as well as whether incentives actually work. One of the more common an well-known incentives is that of a tax deduction for individuals who donate to Goodwill charities (clothes, toys, electronics, furniture, etc.). Yet, individuals as well as larger corporations can get tax deductions from the IRS by donating sums of cash to a charity. Does an incentive, such as a tax break, take the selflessness out of altruism?
This stems partly from our discussion of Head v. Heart that has been ongoing in the recent weeks. Some say that it is morally wrong to give rewards to those who contribute, that in times of need when incentives are not able to be given, there will be no giving because the reward is not present. In the purest sense of altruism, donors should contribute without the expectation of something in return. I argue that providing an incentive is providing an individual a reason to give when not all individuals contribute selflessly in society. For example, a natural disaster provides a type of emotional incentive to give to those effected, yet as we have read about in class, that eventually fades with time. To effectively raise the necessary funds to meet a desired goal, incentives such as tax relief is not only ethical, but imperative for an organization to improve its programs over time. In a way, responding to an incentive that is meant for good is a balance of head and heart.
This is a topic I feel should be raised when examining how we give. It raises questions on our personal definitions of altruism when looking at how we would like to give, and the way we look at how others give in a broader sense. In the truest definition of altruism, incentives take the expense to the giver out of the equation. But, in the world we live in and for organizations to effectively raise the needed funds, incentives are needed.
Thank you for taking the time and consideration for reading, I look forward to reading your thoughts and arguments on the issue.
These are two articles that I found regarding two sides of the topic:
https://www.theodysseyonline.com/ethics-offering-incentives-charitable-acts
https://nonprofitquarterly.org/2016/11/04/development-professionals-purer-motives-raise-funds/
Hi Jack,
ReplyDeleteThank you for bringing up such an interesting topic!
Since the beginning of the semester when we read The Neuroscience of Giving from The Path Appears, I have struggled with calling philanthropic giving, altruism. It was reported that donating increases the happiness of the donor, and “makes them feel good.” Now, if an altruistic practice is meant to be selfless and without interest of personal gain, how can something that benefits the donor be truly altruistic?
In your post, you discuss incentives to donate, and question whether or not that makes the act of philanthropic giving selfish. I would argue that donating for reasons of tax incentive is not any less selfless than donating because “it makes you feel good.” From each point of view, the person making a donation is gaining something from their act, and don’t ultimately hurt anyone because of it. Why then, is donating for a break on your taxes presented as being immoral, while donating because it makes you happy perfectly acceptable? Peter Singer advocates for Effective Altruism by stating that it will make you happier, but another equally selfish and non-harmful form of incentive is unethical?
Even if philanthropic giving is in some ways selfish, does that really matter in the end? Is it really that important to scrutinize and dissect the reason behind people’s donations? In my opinion, if a person is donating their money to a good cause that will help people in the end, does it really matter why they are giving? There are countless problems that need fixed in the world, and I can guarantee that there are not enough people out there who will donate selflessly to solve them all. If giving people an incentive is what it takes to make them donate, then I say go ahead and do it.
You mention an argument presented against giving incentives that states that there would be no giving if the reward can no longer be offered. In my opinion, I would have to disagree with this statement. If the incentive is taken away, the only people that will no longer donate are the people who needed the incentive in the first place. I strongly believe that those who are selfless donors will still give their money without the presence of the incentive, and that there will still be giving without chance of reward. Even if the incentive can only be offered for a short time, the money that would be donated because of it is money that otherwise would not have been given. Therefore, I ultimately see offering the tax incentive to donors as something that will benefit the organization, even if it cannot be offered in the long run.
All in all, I don’t see any problem using incentives to increase charitable donations. In Economics you learn that people will respond to incentives, and I believe that creating these positive incentives is not only a smart decision, but one that is necessary if charities want to increase revenue. The cynic in me pushes me to believe that all people are inherently selfish, and that creating an incentive to donate is necessary to push people who otherwise wouldn’t to give their money to someone in need. There are people out there who give because of what is in their hearts, and there are many more who have money to give that just need a little push to give it away. You might see it as immoral or wrong, but do you really think a charity isn’t going to take someone’s money because they needed an incentive to give it?
Hi Jack,
ReplyDeleteI definitely agree that incentives are useful in raising support for non-profit organizations. I also like how you mentioned the controversy and stigma regarding these tax break incentives because this is definitely a topic that is very relevant to philanthropy today.
After reading an article from the New York Times, I found that this stigma surrounding incentivizing donations stems back to the 1940s and 1950s when the government first started offering tax breaks to businesses that donated a portion of their assets to charities in order to incentivize business (large businesses faced the highest tax bracket and these tax cuts would help lower the burden of taxes on these businesses while simultaneously encouraging philanthropy). As the government slowly began to increase the percentage of income donated and therefore claimed to be tax exempt from 15%-100%, businesses began profiting from donating to charities as their long term capital gains rate plus the income tax rate exceeded 100% assets. Because of this, many people today still believe that incentivizing philanthropy transforms giving from selfless to selfish, however, since the 1950s the government has capped the amount of before-tax income claimed for a donation to 50%. This ensures businesses cannot profit from philanthropy and that no one can dodge their taxes, however it still incentivizes individuals and firms to donate.
Although the intentions of firms or individuals who donate a portion of their income and claim it as tax deductible may not be as genuine or pure as other philanthropists who choose to give on their own account and without incentives, I agree with you that the use of incentives are important in raising capital for non profit organizations. These incentives capture funds that previously might not have been donated and funneled towards important causes.
One disadvantage of incentives, however, may be that certain individuals who may donate just for a tax break may not do sufficient research on which organization they donate to and therefore their donation may go to an organization that isn't very effective.
This isn't to say that passionate philanthropists wouldn't take a tax-cut. Many assume that those who donate and claim a portion of their income to be deducted as tax exempt wouldn't have previously donated to a charity. This may also contribute to the stigma that tax incentives take the selflessness out of philanthropy, when in part these incentives may just be rewarding those who already give.
Here is the article I found:
https://www.nytimes.com/2012/07/29/business/if-raising-top-tax-rates-encourage-charitable-giving.html?_r=1
Hi Jack,
ReplyDeleteWhile we as individuals should strive to give selflessly, I don’t see that it’d be wrong for nonprofits to provide incentives in order to further their missions, especially when studies show that this method has been effective in fundraising. According to the Association of Fundraising Professionals, “the proportion of people who make financial contributions to charity if significantly higher in countries offering tax breaks for giving . . ."
One argument that I found against offering incentives in return for charitable donations is that it could deteriorate the character of donors and enforce “the ‘what’s in it for me’ mindset” (Okoro, 2017). This attitude could become particularly harmful after catastrophic events, when donations are most needed but incentives aren’t available. However, it’s in those dire circumstances that the general public is the most responsive. I feel as though people’s empathy would be enough to inspire philanthropy, so much incentive wouldn’t be necessary anyway.
I believe organizations simply need to find a balance, and only offer incentives when necessary. Dunkin’ Donuts gave free gift cards during cold winter months, when the American Red Cross most struggled to get blood donations. I wouldn’t support them giving that same incentive during months when goals are already being met thanks to pure altruism.
References:
http://www.afpnet.org/Audiences/ReportsResearchDetail.cfm?ItemNumber=28295
https://www.theodysseyonline.com/ethics-offering-incentives-charitable-acts
John,
ReplyDeleteI enjoyed reading your post and feel you brought up a good area of discussion. As far as altruism goes, I don't believe pure altruism widely exists because nature selects for those who act primarily in their own self interest. Philanthropy will forever be a mutualistic act in my eyes, and there's nothing wrong with a donor feeling good about their actions or benefitting in some way. I think what's great is at the end of the day someone chooses to better more than just themselves. Of course, I would agree that a line should be drawn in situations with things like companies gaining profit off their donations as Allyson mentioned with reference to the 1950s. This idea can be driven to unethical situations in large scales and I am aware of that.
To dive more into the idea of incentives, I think it’s worth considering the consequentialist and deontological ethics. They are basically the opposing sides to answering, “Do the ends justify the means?”. Consequentialism (as the name suggests) only cares about the consequences of an action and would say it doesn’t matter what incentives are offered so long as the desired charitable work is done. Deontology focuses on how actions follow certain moral rules and would say its wrong to take a reward for what should be a selfless action. Some have argued that deontological ethics is flawed as it is too absolutist - it says that some actions are always good or always bad without any judgement of the context of the action. In this context I might agree. If a small incentive such as a tax break can greatly boost charitable donations and work (if the good done outweighs the cost paid) then I don’t feel its anything to criticize.
Hey Jack,
ReplyDeleteYour topic is something I have thought a lot about. I have kinda dumbed it down to my logic that help is help regardless of the helpers willingness or reasoning to help. If a donor contributes to a nonprofit for his tax reduction that organization is still better for it. The money is not corrupted because it might not have been given for the most altruistic reason. In regards to your ethical question about incentives being used to increase the effectiveness of fundraising I would as this: is the organization better or worse off as a result of it? If the funds would have otherwise not been given, and now they are because of incentives then they are a positive impact. People utilizing these incentives may not have the most altruistic reasoning at heart but they will be funding people who do and who would have otherwise not been able to help. Things like taxing the rich benefit people regardless of the rich person's willingness to contribute. So provided the methods for soliciting giving are good and not being used as opportunities for the rich and powerful to flaunt their wealth at galas that cost more than they raise. Then at least in my opinion, the use of incentives is an ethically sound way to generate funding for a good cause.
Jack,
ReplyDeleteI remember in an article we read at the beginning of the semester, a research showed only about a quarter of the donations were voluntary, which were donated without social pressure. Does that mean if we remove the factor of social pressure, there will only be about one fourth of donation going to charities? Probably not enough to keep most non-profit organization functioning. If we further take away the incentives to give, I doubt anybody will even consider donating, because it is a part of our human nature to act on incentives.
So, I don’t consider raising fund by boost using incentives unethical as long as organizations stay truthful to its donors. In the end, they are trying to make positive impacts. As a matter of fact, I think as a non-profit organization, being able to incentivize donors to give is crucial in order to stay in business. Most charities incentivize donation in a variety of ways, such as celebrity sponsorship, newspaper, internet articles, photographs as well as social media. And organizations who are able to do that successfully receive larger fund and raise money more effectively.
Speaking of altruism, I find that I am believing less and less in the very existence of altruism, I just don’t think that human are created this way. Just like Andrea said, people engage in philanthropy on a mutualistic basis. It would be a great achievement if a non-profit organization can create a situation in which both the donor and the charity enjoy gains, that is, making the donor feel good about making the donation, and giving a sense of accomplishment as a reward for giving. Nothing unethical needs to be involved.