Opinion

Editorial: Public should know who gets tax breaks for charitable donations

Friday, May 14, 2021 -- If anyone is worried about retribution for a charitable donation, particularly one that allows a tax deduction, they'd best look elsewhere to exhibit their generosity. Sunshine and transparency. They are democracy's best disinfectant.

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CBC Editorial: Friday, May 14, 2021; Editorial #8668
The following is the opinion of Capitol Broadcasting Company.
One of the latest trends charging through Republican-dominated state legislatures around the nation is a right to privacy for donors’ charitable organizations. They want it to be against the law – a crime in fact – to release the names of donors unless they and the organizations, agree to reveal it.

It isn’t anybody’s business, so the contention goes, how someone spends their charitable dollars so why would anybody care?

Well, we all should care about the bill that passed the state Senate Tuesday night. Keeping donor information secret will make it even more difficult for citizens to know who is bankrolling politically motivated issue campaigns (attacking “critical race theory,” fighting tobacco use among minors, eliminating state-run alcoholic beverage sale, for example). These kinds of efforts often have an impact that spills over into the campaign arena.
Even one of the original sponsors of the bill, Minority Leader Dan Blue, D-Wake County reflecting on the actual implications of the legislation, had a change of heart and voted against it.

Those who contribute to typical nonprofit organizations (known in tax jargon as C3 charities) get tax deductions. The government – federal and state – allows folks to reduce their tax bill because of the contributions. It only makes sense that if anyone gets a tax break for a contribution to non-profit organizations it should be public information.  After all, it is the rest of the taxpayers who carry the burden of making up for the break that goes to charity donors.

A contribution to another kind of nonprofit, known in tax-talk as C4s, doesn’t qualify for a tax deduction. Donors to these organizations, often called “dark money” groups by those in political circles, are not public.

The identity of those who promote causes – and those paying for it and getting tax breaks – should be known. This is the kind of transparency that makes democracy work.

Nonprofits that qualify for tax-deductible donations are NOT permitted to endorse candidates but can promote and comment on causes and issues. If an organization is essentially going to be a mouthpiece for its donors, the public deserves to know, and should know, who is bankrolling the megaphone.

Nonprofits, as a matter of pride and identity, should be anxious to reveal their donors. Those who are giving the money should want people to know of their commitment and concern.

The latest concern springing forth without any basis in fact, is that the so-called "cancel culture" intimidates potential charity donors who supposedly worry others might be suspicious and take intimidating action.

“Our society hangs in the balance," warned Sen. Bob Steinburg, R-Chowan. Steinburg who has, in the last few months, emerged as among the most vocal in the legislature promoting a variety of unfounded conspiracy theories including the unsubstantiated notion that Joe Biden did not win the 2020 presidential election. As we all know, it has been demonstrated beyond any reasonable doubt that Biden did fairly win and get the most votes.

But the real threat to society is the effort to hide important information from citizens about who is really behind campaigns pushing certain issues and elevating the profile of certain voices and personalities. This bill would make it a crime to disclose, without permission of the contributor or the nonprofit, donors' names.

We have laws, important ones, that seek to make sure citizens know who contributed to candidates and political campaigns. This kind of public information helps our elections by giving citizens more information. It works well.

If anyone is worried about retribution for a charitable donation, particularly one that allows a tax deduction, they’d best look elsewhere to exhibit their generosity. Sunshine and transparency. They are democracy’s best disinfectant.

No one who wants a tax deduction should be able to keep a charitable donation secret.

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