Friday, January 29, 2010

Haitian Giving - It's Not Enough Yet

On a recent broadcast of NPR's All Things Considered ("Haiti Donations Soar Despite Economic Crisis," Jan. 26, 2010), Melissa Brown of the Center on Philanthropy at Indiana University said that giving in the 13 days immediately following the Haiti earthquake outstripped all previous giving efforts, including the previous gold standard: the donations after 9/11. The overall giving has been nearly $520 million dollars already, which is very impressive. As Brown points out, this is in part because systems were immediately put in place - such as the text-giving campaign - that made giving easy.

The average (depending on how you define average) is coming in at about $50 to $150 per person, which most people could probably fit into their budget. In a time of economic trouble, it's heartening that people are able to give this much.

However, one thing occurred to me as listening to this - on a per capita basis, are we really giving more for Haitian relief than we gave for 9/11 relief? Remember that 9/11 also happened during a recession, though it wasn't as severe as the current one.

Consider the 9/11 numbers, as compiled by the New York Magazine. 2,819 people died in the September 11 attacks, 1,609 people lost spouses or partners, 3,051 children lost parents. Let's assume also that, on average, for each person lost, there are 2 parents and one sibling also left behind. Let's also assume that for each widowed person, there are two parents and one sibling. That gives us 20,763 whose lives were directly and profoundly affected by the deaths on 9/11. Let's go ahead and double it, to include close friends and such. So we get about 42,000. In addition, the "by the numbers" count indicates that 422,000 New Yorkers suffered from post-traumatic stress disorder following the events and 146,100 people lost their jobs - so that brings the count up to 610,100 ... let's round up to 750,000 people who are directly affected by the 9/11 disaster, to some degree or another. Okay, let's double it again to 1,500,000 people. This is probably a very generous estimate.

Now, according to these numbers, $1.4 billion was given in donations to 9/11 charities. (This is on top of the $40.2 billion paid out in insurance payments worldwide, plus billions in government expenditures for renovations of downtown Manhattan/etc.) So, just on the charitable side, donations came in at about:

$1.4 billion / 1.5 million people = $933/person affected*

* I am defining "affected" very broadly here, but I'm trying to make a point.

Estimates indicate that 3 million people were affected by the Haitian earthquake - exactly twice as many as September 11 (according to my estimates). Therefore, if we assume that their lives are just as valuable as the lives of people who suffered from September 11 (an assumption that shouldn't be too controversial), then the total amount that we should expect to be donated overall is:

3 million people affected * $933/person affected = $2.8 billion

Now, it's important to remember that these are just the charitable amounts. The government spent billions of dollars in taxpayers money to rebuild infrastructure, and there were billions of dollars in insurance payouts, none of which are figured into these calculations. Haiti has virtually none of this at its disposal ... it's all charity, either by individuals or by other governments. (You could argue that our rebuilding was funded by "charity" from China, in the form of loans, but that's another story.)

So, while it's certainly laudable that we've given so much in such a short period of time, the key thing to remember is that, over the long haul, these people need a lot more help. About $1,000 dollars per life affected would go a long way in a country like Haiti, toward giving them a future worth looking forward to.

We have about $2.28 billion to go.

Let's step up.

Thursday, January 28, 2010

Save on 2009 Taxes by Helping Haiti

Normally, if you itemize deductions you can save by including charitable donations to appropriate non-profit organizations. The problem with this is that, unless you're diligent about tracking your tax liability and change your W-4, so that your withholding is adjusted accordingly, you really don't see this as a benefit until as much as a year after you've given the donations. For people moved to donate in the wake of the Haiti earthquake - which has become the largest charitable giving activity performed by Americans at $518 million, even exceeding the amount donated following 9/11 - these deductions would take over a year to materialize, until people file their 2010 taxes.

Fortunately, it looks like Congress is actually doing something right, and has implemented a new rule that allows those donating to Haiti relief to retroactively include this deduction on their 2009 tax return, if they choose to. This means they could make the donation, file their taxes, and get the deductible amount in their tax refund in a matter of weeks. There's a limited window for when those donations need to be made to count on the 2009 return.

Note: This deduction applies also for donations of supplies and other property, but I strongly encourage people not to donate supplies. Getting these to Haiti just isn't efficient. It's better to give to charities like Doctors Without Borders or UNICEF, who have infrastructures and supply chains in place to get these supplies there quickly and efficiently.

Now, you have a choice ... instead of doing this, you can still include this donation in your 2010 tax return, which certainly makes sense if you already have low taxes in 2009 and are worried about your 2010 liability.

(I'm in this position, as I have research and promotional expenses from String Theory for Dummies in 2009 that largely offset my other income, but don't yet know what my income will be in 2010, largely because I don't know if 40 Days of Giving will actually get published - i.e. generate revenue - or not.)

Of course, for many Americans, itemizing doesn't really provide much benefit over taking the standard deduction, but for some it has a real impact ... and these are the people who, as a rule, have more income overall, and therefore likely have more discretionary income available to give larger amounts. If you are in that category, and you've given to Haitian relief, it may be useful for you to think about using this retroactive deduction to help offset your 2009 tax liability.

The legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them by means which the law permits, cannot be doubted.
- United States Supreme Court (Gregory v. Helvering, 293 US 465)

Saturday, January 23, 2010

The Merits of Service Leadership

Today I spent the morning at the District 11 Toastmasters Leadership Institute, along with some of my fellow members of the Chief Anderson Toastmasters chapter. For the second session, I attended a fascinating presentation (given by Jennifer Pillion-Walker) which is relevant to my 40 Days of Giving project:

Service Leadership

For those with only a passing familiarity with Toastmasters International (as I had until a few months back), it's most likely known as a public speaking organization. And it's true that the major component of what takes place within the organization - public speaking and the evaluation of those speaking so that members can grow in their abilities.

However, in addition to this Communication track, Toastmasters also features a Leadership track. Now, this is clever on a number of levels ... the most obvious being that it gives members a tangible benefit for taking leadership positions within the organization. To be awarded with the highest level within the organization - Distinguished Toastmaster - you must commit a not-insignificant amount of time to leadership activities.

The structure of the leadership taught and exercised in Toastmasters is, therefore, leadership through serving others. The alternative is an authoritarian leadership style, which doesn't really tend to work in a situation where people have choice about participating. (It can seem to work, at times, if people have - or feel they have - no options. But the truth is, people always have options, so it really never works.)

As Pillion-Walker points out, this is service leadership, a term coined by Robert K. Greenleaf, after whom the Greenleaf Center for Servant Leadership in Westfield, IN, is named. He, of course, didn't come up with the concept - Lao Tzu was citing this concept in the 4th century B.C. and a few hundred years later Jesus also had a thing or two to say about it. In more recent times, leadership experts Ken Blanchard, Peter Drucker, and Stephen Covey have taken up the cause.

The servant-leader is servant first... Becoming a servant-leader begins with the natural feeling that one wants to serve, to serve first. Then conscious choice brings one to aspire to lead. That person is sharply different from one who is leader first... The difference manifests itself in the care taken by the servant first to make sure that other people's highest priority needs are being served. The best test, and the most difficult to administer, is this: Do those served grow as persons? Do they, while being served, become healthier, wiser, freer, more autonomous, more likely themselves to become servants? - Robert K. Greenleaf

The best (rulers) are those whose existence is (merely) known by the people.
The next best are those who are loved and praised.
The next are those who are feared.
And the next are those who are despised.
It is only when one does not have enough faith in others that others will have no faith in him.
(The great rulers) value their words highly.
They accomplish their task; they complete their work.
Nevertheless their people say that they simply follow Nature. - The Way of Lao Tzu (Tao-te ching)

But Jesus called to him and said, "You know that the rulers of the Gentiles lord it over them, and their great ones are tyrants over them. It will not be so among you; but whoever wishes to be great among you must be your servant, and whoever wishes to be first among you must be your slave; just as the Son of Man came not to be served but to serve, and to give his life a ransom for many. - Matthew 20:25-28 (also essentially the same quote from Mark 10:42-45)

Leadership is lifting a person's vision to high sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations. - Peter F. Drucker

Leadership ... is not something you do to people; it's something you do with people! - Leadership & The One Minute Manager by Ken Blanchard

If your actions inspire others to dream more, learn more, do more and become more, you are a leader. - John Quincy Adams

A footnote in my Tao Te Ching says that "best" can be translated as the "highest type" ... would that we all would choose to be the "highest type" of person, let alone the highest type of leader, that we could be.

Friday, January 22, 2010

Investigating Charities

When I began donating to charities, one of the first problems I ran into was trying to figure out which charities I wanted to give to. Some charities are so massive and bloated, or tied up with corporate interest, that the donations just don't get where they need to go. Sometimes you'd be better off giving to a smaller charity than a larger one, because those charities actually help people.

One tool which I find very helpful in sorting all of this out is Charity Navigator, a website that evaluates most major charities on their efficiency and capacity. It's a good site to check before you give to a new charity. Charity Navigator also has some great tips for giving for Haitian disaster relief ... especially, you should consider that direct donations of supplies just isn't an efficient way to help out. I've seen a lot on the news about people donating supplies, but getting these supplies from all over America to Haiti just isn't practical.

Though Charity Navigator is useful, it still takes some care. For example, one of my favorite charities is Heifer International, which only has a rating of 3 out of 4. Heifer provides livestock to people in developing countries, so they can be self-sustaining. However, donations to Heifer has a "pay it forward" element (each recipient donates the first offspring of the animal they received) which isn't taken into account in the rating, and it provides training to the recipients along with the animals, so it's understandable that there's more overhead with this charity than some others.

I can't stress enough the importance of these elements of Heifer. It's very easy to give money, but much harder to give it wisely. Resources are limited, so they should be leveraged in ways that provide "residual philanthropy" (a phrase I heard from real estate mogul and financial expert Robert G. Allen) ... a benefit that begets further benefits down the road, helping to solve the problem instead of just ameliorate it. This is summed up by the saying:

Give a man a fish, and he'll eat for a day. Teach a man to fish, and he'll eat for a lifetime.

Tuesday, January 19, 2010

The Meaning of Giving

I'm pleased to announce my new blog, my new project, and (hopefully) my new book:

40 Days of Giving: An Experiment in Charity

Giving has a long history. In fact, giving is a central theme in many cultures. It features prominently in all three Abrahamic religions, and also among the mythologies of the ancient and new world.

In the Bible, the Earth is given over as a gift to mankind (except for a couple of trees), and human suffering is a result of taking more than was offered. The first murder is over the gifts given by Caine and Abel. Upon liberation from Egyptian slavery, God mandates a gift of the firstborn children (and cattle) from his chosen people. The Bible (both Old and New Testaments) assert numerous times that generosity will be rewarded. Zakat, or alms-giving, is one of the five pillars of Islam, and sadaqah (generous giving beyond the required 2.5%) is also encouraged as a means of gaining further divine favor.

Among the Greeks, it was believed that the knowledge possessed by humanity was a gift, for which Prometheus was continually punished by the other gods. According to Homer, the Trojan War began over a dispute over who was the proper recipient of a gift (the golden apple - "To the Fairest"). Native American tales are replete with gift-giving, often tied into the cycles of nature.

Even this brief overview makes it clear that the giving of gifts has a long and varied story woven throughout the narrative of human culture.

But until about two years ago, this story of giving had little influence on my own life. It wasn't that I never gave to charities, but it was that giving wasn't a regular part of my life. I occasionally dropped some money into a Salvation Army bucket at Christmas, or gave money when a charity called me, but that was it.

In the last couple of years, that's changed a lot. I now give money regularly to charities, and I feel (sometimes against all reason) as if rewards are coming into my life because of it, but ... is that enough? Why has giving become so important in history? Is there a way to put giving to the test, and see what happens when someone embraces giving as the central theme of their life?

These were the questions I began asking myself, and the answer I came up with is one that comes fairly naturally to someone who thinks logically and scientifically:

Test the hypothesis.

For 40 days, from February 17 through March 28, I will give away every cent of money that I earn. I will read about and study giving, across various cultures and religions, and try to find out what others have felt about it. I'll share my thoughts and record my experiences, and if any strange coincidences come up, those too will be documented

In this age, where ancient tales no longer guide us as they once did, it's incumbent upon us to individually explore the world to find out on our own how to behave morally. I think that giving is a good place to start.

My hope is that, by the end of it all, I'll have woven my own story into the narrative of human culture and, just maybe, convinced some other people to look into this whole "giving" thing.

Intrigued? Well, you can take part. Followers of this blog will have the opportunity to provide suggestions for gifts, offer their own stories, and maybe even receive some gifts of their own. More announcements along these lines will come in the following month, leading up to the start of the project on February 17.

I look forward to it. Are you?