November 22, 2012 • 45 mins
Sure the fatcats get all the credit for donating millions, but did you know US households making $20,000 or less contribute the highest percentage of their income to charity? Learn more (not to mention a sexy look at the U.S. tax code) in this episode.
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Episode Transcript
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Speaker 1 (00:01):
Welcome to you stuff you should know from house stuff
works dot com. Hey, buddy, if you don't mind if
I plug my November page real quick, please do. I
am growing a mustache this month for November for uh
for cancer research, specifically male prostate cancer research. That's right.
(00:26):
And you can donate to my team, which would be
pretty cool because you know, you get a free podcast
and it'd be nice to grow a little money towards
cancer research in the name of nice here, give him
some money. He's growing on facial here to help a
charitable organization engage in really important scientific research. That's right.
(00:46):
And you can go to mobro dot c O slash
Charles Bryant and that's my page, or just go to
the November site. Type in Charles Bryan in the search
bar and look for the picture of me. There's only
a couple of ups out there. Check's wearing a red shirt.
That's right. Yeah, um, so what is that again? That's
mo bro dot CEO slash Charles Bryant. Yes, thank you
(01:07):
in advance. Yeah, that's nice chucking All right, let's get
to it, hey, and welcome to the podcast. I'm Josh Clark.
With me is always Charles W. Chuck Bryant. Oh, hold
on a second, buddy, Yeah, I think you've got something
you need to say. Oh yeah, um, let's go ahead
and plug our buddies over at Science Channel, our other home. Yeah. Uh.
Then they're airing punkin Chunking, the annual awesome fest of
(01:30):
shooting pumpkins through the air as far as you can
and then making them explode on contact. It's pretty great. Yeah,
it's a it's a real thing. Uh. And then Science
Shane ghosts every year and films it and they air
it as what's become a Thanksgiving tradition. So they're gonna
air it this Thanksgiving November twenty two and a pm. Right,
(01:51):
that's right. And we are still waiting to get invited
to go chunk punkins ourselves. We got invited last year,
did we? I think so? Oh yeah, but it was
like you guys can come if you want, if you
happen to be in the Northeast. Yeah, but it wasn't like, uh,
I wanted a formal invitation to participate. Okay, I got you. Um,
and uh, if you are in the punkin Chunking, Uh,
then you might want to go online to check out
(02:14):
the road to punk and Chunking. That's already up. There's
some great video to search punkin p U n k
I N chunking c h U n k I n
and science in your favorite search engine and it'll bring
that right up. Uh, and don't forget November twenty two,
this Thanksgiving at a p m. On Science Channel, punkin
Chunking the tradition. Yes, all right, you ready now, I'm ready, okay.
(02:38):
Back today is our good friend and longtime producer Jerry. Yeah,
I alins we had the class machine. Yeah. Well, people
are slow clapping all across the world right now, right,
very sar Jerry, We're so like you're back so much.
Just let know a slow clap is meaningful, yeah, but
(03:00):
can very easily be turned sarcastic. Just kind of cut
your head, decide. And I wonder what the first slow
clap was in a movie? You know, such a trope
at this point, but I wonder who invented it. A
bet of that information is out there. I want to know,
don't you want to know? I'm sure some movie website
is probably tracked this down. First slow clap. Let's find it, everybody.
(03:21):
Well wait, oh wait, uh, we should probably just go
ahead and do let's do it, Um Chuck. Yes, have
you ever given money to somebody who did nothing for
you in return? Maybe didn't sell you a good or service.
I just gave him the money. What do you mean
just like uh someone panhandler, charitable organization? That's philanthropy. You're
(03:47):
a philanthropist. Did you know that? Like that's all it takes.
And even better, this is the bright shiny episode. In
my opinion, I'm proud of this one. Um, have answer,
p works. You don't even need money, donate your time.
Your time is very valuable, Chuck. Yeah, And I think, well,
(04:09):
I can't say this because I'm just speculating, but it
seems to me that people are either like you know,
my my time is too valuable, but like I can
write someone to check yeah, or like I'm a little
light but I can't give my time. Or you can
put it like, well, the government doesn't let me deduct
time that i've donated, but they will let me deduct
the hundreds of thousands of dollars i've donated this year.
(04:31):
They should let you deduct time because they've actually figured
out I have like averages, like an hourly wage, volunteerism. Yeah, nice,
that would be awesome. Let's get that in the tax code.
That's a great idea. UM. You can, however, like if
you were, say, um, donating your time by going down
to like Louisiana to help clean up after a hurricane,
or Kansas or Missouri to help clean up after a tornado,
(04:56):
and you like bought a bus ticket or you drove,
you can deduct transportation and costs. But once you get there,
the government doesn't care about you. But you candiduc money
as far as transportation. Oh and just regular contributions, right.
It depending on on who you give to. And we
(05:16):
have a very thrilling segment in this episode about the
tax code, um, the ins and outs of it. Chuck
is not very excited about it. I think this is
kind of neat um. But we're talking about philanthropy and
it's kind of become I don't want to say vogue.
Maybe it has for the ultra rich, some of the
richest people in the world, at least the richest people
(05:37):
in America, like Bill Gates, Warren Buffett yea to sign
a pledge that Bill Gates created, the Bill and Melinda
Gates Foundation created this thing. Saying, hey, we're going to
donate at least half of our vast wealth, and they're
trying to sign billionaires up to agree to this and
then we'll just be super super super wealthy. Well, the
(06:00):
Bill and Melinda Gates Foundation is this like superstar foundation
that was like in the assets that controls is like
the GDP of several nations. That's pretty amazing. It's like
thirty seven billion dollars in assets right now. You can
do a lot of good with that. And one of
the people they signed on was Warren Buffett, and he's
worth forty nine billion dollars right now. He's pledged of
(06:21):
his fortune to the Gates Foundation afterward after he's dead,
which I mean he's getting up there. So they may
have about eighty billion dollars in assets in their control,
which is a well, I was gonna say that's almost
as much. It's about three quarters of the assets are
the value the capital value of the most valuable corporation
(06:43):
in the world, Apple, which ironically had a founder who
may have never given a cent to charity. Oh really,
Steve Jobs died without officially having given any money to
charity at all. Any He was notoriously stingy, and after
his death there is a lot of talk like, Okay,
(07:04):
did he did he really amass an eight billion dollar
fortune and not donate any of it, And a lot
of people were like, you know what, even if he didn't,
you know, to heck with you, he gave this technology
to the world and people are using it to better humanity. Well,
he doesn't need to give money. And other people are like, yeah,
if you have eight billion dollars in personal wealth, you
(07:25):
need to give some of that for other things like
water and stuff that you can't use an iPhone app for, right, Sure,
I guess it depends on how you feel about it all.
And then there was another camp that was saying, hey,
it's totally possible that he was just not a jerk
and he donated a lot of money, But he did anonymously.
He didn't want a bunch of glory or he didn't
want a bunch of charities knocking down his door like, hey, hey,
(07:48):
give us some too, for whatever reason. But you're saying
that did not happen. He didn't give anonymously. No one knows.
It's a mystery. Oh, I thought you said for sure
he didn't give any money ever, because he was so
cheap on paper. Oh there is no no record of
him ever giving a cent to charity, but it's pretty
pretty interesting, Like I can't imagine having a billion dollars
and not giving any of it away. But he Bill
(08:10):
Gates approached him and he's like, nah, I'm not signing
that pledge, and will you pick up the check? Right?
Exactly right? Yeah, it's like I don't validate parking you again.
I remember um Ted Turner kind of was one of
the original guys to give a ton of money. When
he gave the billion to the un I remember that
was a really big deal at the time. Yeah, I
don't know that he gave it to the u N
(08:31):
What do they do with it? I don't know, because
just they went in the general fun I guess so.
But it was a big deal of the time. This
was a long time ago, but like in the seventies
or eighties, no nineties. I don't have to look, but
it was long enough to go. I go such that
it was a really big deal that someone gave a billion,
A personal individual gave a billion dollars. I think at
(08:52):
the time it might have been the largest individual donation.
That's crazy. That's neat. I like that though, cool guy. Yeah. Um.
But this whole thing, this trend that's going on among
the uber wealthy um is kind of this throwback to
the beginning of the last century when like the Rockefellers,
(09:13):
um and the Carnegies were setting up foundations that are
still around today. Yeah, the Ford Foundation, the UM what
the Rockefeller they created like a bunch of different trusts
Dirty Rock. Yeah, University of Chicago. That was another thing
that was invokes setting up huge universities, Cornell, Sanford, all
(09:36):
those were rich people endowing universities. It was like there
wasn't a university. Therefore, now there is. What's the one
you always here on NPR, the Ford Foundation, the Joseph
and Catherine. Man, it's so in my consciousness, I can't believe.
I can't just split it up. You know, one of
(09:58):
us will shout it in about forty five Yeah, exactly, okay,
But anyway, so um, Yeah, you usually associate philanthropy with
the uber wealthy, but it doesn't have to be. You
can be poor and as a matter of fact, the
poorest Americans contribute the highest percentage of their income of
any income bracket in the country. Did you know that? Yeah?
I did. And in fact, if the richest people contributed
(10:20):
that same percentage, then um, there would be fewer problems
in the world. I would say, So, you know, but
the rich people give the most because they have the most. Yeah,
I've got stats, but we'll get to those later. Well,
let's talk about a couple of stats. How many charities
are there in the country. Well, this says six hundred
thousand in the article. I think it's a little out
of date, is it? Because I found um, in two
(10:43):
thousand eleven there are approximately one million, eighty thousand, one
thirty charitable organizations. Um. This says that was a decrease
from so maybe this counts. Maybe this only counted, although
this is it counts foundations. Yeah, I think there was
an enormal increase. Yeah, because I have the feeling that
this article is written about two thousand three. Okay, well
(11:06):
that that would be a real big increase in a
million a million plus. So, um, three hundred and fifty
five of which are religious congregations, which we'll get into
that three thousand, um, and then uh, in the United
States and two thousand eleven charitable giving total two hundred
(11:27):
ninety eight billion dollars. Yeah. Um, and that was an
increase from two dozen ten, which saw two six billion dollars. Yeah,
two hundred and seventeen from individuals, which is pretty amazing
that se of all charitable gifts are from people. And
if you factor in bequests like people's leaving stuff in
their wills, which is also individuals and family foundations, it
(11:51):
rises to eighty eight percent and more than that, I think.
And then I saw percent on philanthropy dot com, the
Chronical of Philanthropy. Uh well, I have foundations at fourteen percent,
bequest at eight percent, and in last place corporate donations
at five mm. Apparently they get the least. And you
know what I just heard the other day. I don't
(12:12):
know if this is true. Maybe we can get confirmation.
You know, when you go to the grocery store and
they ask you to would you like to donate to
marchup dimes or whatever like on your thing? Yeah, where
is this coming? A listener about this was that? Yeah?
I think maybe that was it. Someone said that they
call those donations under their companies, under their corporation, and
(12:36):
like like you know, the grocery store donated that money
and gets the tllions of dollars and gets a text deduction.
And so I'm not saying you shouldn't do that, but
it's just something to consider for sure. Let's say let's
say you're like, no, I'm not giving a cent to
March of Dimes. Premature babies can all like um, And
then but you really really care about muscular distrophe. So
(12:58):
the time when they hit you up for that sham rock,
be like, of course, not only will I give one dollar,
will give five dollars? Well t s for you because
you have no say whatsoever and where that money is going.
Because they pull it all together in a plot that
they shell out quarterly or annually, and then they take
the tax reexplot. Whoever wrote that in um, like, I've
stopped all together giving it a grocery store now, like
(13:20):
I don't even consider I don't even feel bad saying no, Now,
yeah I have. I have kind of stopped doing that too,
just because if you're gonna give money, that will explain
you should take the time to research and do it
in a way that you feel good about and it's
responsible and that you know where the money is going
and all that stuff. Let's talk about that buddy. Um. Well,
(13:40):
one thing they point out early in the in the
article though, that we should say is that these days
more and more nonprofits are seeking funds in different ways
because um, a lot of government funding is declining and
uh going away all together. So they need money more
than ever. Uh and costs are going obviously. So that
(14:01):
is why you will see websites and billboards and door
to door and flyers and everything to get in touch
with the potential. Uh. Don't donate or don't or don't
or right, that's a good thing. They wrote. A word
means that. Uh. But like you said, philanthropy doesn't have
(14:22):
to be just about money. No it doesn't. But the
word philanthropy means that you love humans. Phil means loving
anthrope or anthropo or anthropy is humankind. So you love
human kind by giving money to it. That's how you're
demonstrating your love of humankind. Um. Checking out charity. So
(14:43):
this is a big one. It's a big deal. I
don't know how many people do this. I think, I
don't know. I want to say I don't you know,
but I mean, like normally the charitable giving I do
is like, you know, whoever's bringing the Bell at that
moment or something like that, or it was UM or
(15:05):
it's on an individual basis, like it's not necessarily through charity, right,
I hear you. UM. They say there are a few
guidelines you can look for if you're checking out a
charity to judge whether or not you think they're you know,
spending money wisely, UM generally fifty of every dollar should
go to the actual work the charity work, right, and
(15:27):
then the other remaining for operational marketing administrative costs. So
I I from what I saw, that's a very generous
towards the charities. Percentage I saw of your costs for
UM administration and fundraising should go to programs. But that's
(15:49):
charity choices dot com that says that that's probably the ideal. Yeah,
I'm sure. I think that the sixty cents is like
anything less than this and you should really like examine.
It means there's people at the top taking a big
paycheck or they're not doing a very good job of
managing their money. But it could also mean that if
you look at the age of the charity or the
size of the charity, like there's an economy of scale
(16:12):
in raising money. So if you, if you are established,
you have an established name, or you've been doing this
a while, your your phone raising costs are going to
be lower than say a new charity or a radical
charity that that does controversial work, because they're gonna have
a harder time generating money. So just because their fundraising
(16:32):
costs are high, it doesn't mean that they're all like
just enjoying lavish tuxedo based parties. And that's where all
the money is based, rather than business casual based, rather
than turtlenecks and jackets based. If you want to find
out about a charity job in it, you can write
(16:53):
a letter to the local charity registration office, usually within
the state Attorney General's office, and six eight weeks later
you might get a letter back. These days, you can
go online and uh, I went online actually today and
registered with guide Star and there's a charity. No has
the money started coming in? Um No. Guide Star is
(17:15):
one of the places you can go to check out
other charities, and you have to register to log in.
And because I wanted to check out, you know, like
our friends at Cooperative for Education. Yes, like all the
records are there for what you're looking for. I looked
at it text form, and you know what my first
thought was, Man, I feel so bad that Joe and
those guys have to fill this thing out every year. Dude,
(17:39):
it was so long, and but they don't have to
file taxes. So yeah, true whatever, it's all awash, right,
but you'll be glad to know they're you know, obviously
doing great work. They're on the up and up. We
knew that, Yeah, we definitely didn't know that. We saw
it firsthand the the we checked those guys out personally,
I stand behind Cohen. Uh. The Center for Better Better
Business Bureau, it's another place. The Foundation Center is another place,
(18:03):
and you can get basically have access to the numbers
if you really want to check it out thoroughly. Right,
So the form is gonna have like a general description
of the work they do, the programs they do, who's
running the thing, where their money is going? Uh? And
I think it gets a little more specific than just
like programs fundraising an administrative costs. Right, doesn't it break
(18:26):
it down a little more like there's had all the
different you know drives that they did, and it broke
it down specifically to you know, if you were into
looking all that stuff up. It's there, right, and I
mean like if you really want to know, I mean
if you give to like a mega charity like the
Salvation Army in the United Way or something like that.
Like they have more than than just one program, so
(18:49):
they may be doing work that you don't necessarily agree with.
So there's another reason to go look at for um
because you'll see what what programs they're carrying out, like
all of them. Yeah, well that's what the Common Foundation
got in hot water, remember with the whole plan parent
a thing last year or was that early this year?
It was so at some point in the recent past. Yeah,
So that's you know, there's when you get that big.
(19:11):
There are other associations you might want to know about. Yeah,
depending on your your affiliation, you're socio political affiliation, that's right. Uh.
There's about three ways that they're going to be spending
their money though program services, and these are what you
want your money to be going to most. If you
want to just feel better about yourself at night, you
(19:32):
don't want to think paid the water bill there at
the building. You want to think I've put a sandwich
in a needy kid's hand a good one too. Uh.
Management operational costs is next. Like I said, it's a
little less exciting to think about that, but they need
to pay their rent and bills, definitely they need. And
then you've got fundraising, yeah, which can really rack it up.
(19:54):
I mean it's everything from like direct mailer's too lavish parties, um,
if you're courting celebrities and they like that kind of thing. Um.
And a well run, well managed charity can take you know,
X number of dollars whatever they're they're fundraising costs are
and grow it exponentially, use it correctly. But there's also
(20:15):
charities out there that don't know what they're doing and
shouldn't get the same funding. If you've got over a million,
there's bound to be a handful that aren't quite right,
you know, and some that are outright scams. Yeah, unfortunately,
and I think we have one of those, don't. Well.
There was a guy, um in this article, there's a
guy in Texas who after a tornado I think hit Austin,
(20:38):
he set up a charity that asked people the mail
one dollar donations checks made out to cash and mail
him too this po box and people did. He kept
the money. Unsurprisingly, there's just there's a bad place for
those people in their next life. Drifters. It's about the
worst thing you can do. No one likes you when
(20:58):
you're a grifter. Other grifters don't like you. Sure they'll
make movies about you, but I mean, like that's about it, Josh.
How would you go about so listening money if you
were a charity, if you're a nonprofit, well not for profit, Well,
one of the things I would do is probably take
some of my initial UM money, my initial capital, and um,
(21:21):
I would buy some mailing lists of other donors from
other charities, which is extremely common practice these days. Yeah,
I wonder what kind of money to make doing that. Well,
that's that's one reason they do it. They they like
a charity, will will compile a mailing list and they'll
sell it to other charities for income. Um. Yes, and
again it's kind of practice. Uh. They also, um will
(21:44):
sell them not necessarily just for the money. They may
swap them with other charities. Because if you've donated to
a charity, you've separated yourself I imagined from a lot
of other people. UM. And you're somebody who may be
willing to give money to a different charity. You two. Um.
So that's one way I would do a direct mailing.
(22:05):
I would hire a bunch of clean cut teenagers who
are enthusiastic about the charity that they represented, and send
him to the door clearly labeled through uniforms and possibly
matching khaki pants uh as representatives of the charity, complete
with identification, and lots of pamphlets about the programs that
(22:26):
we have. Wow, you're like, you have the starter kit
ready to go. It's I'm ready. I just need some
an injection of funding. I don't know the programs yet,
but everything else I've got lined up. Um. As this
article points out, if you are getting more solicitation than
you like, you can right the letter to the organization
(22:47):
requesting your name be removed. Um. It may or may
not work, and keep a copy of that letter, or
you can just go to their website and unsubscribe. Well
that was I think one of the things that gave
this away was like, um, the it's saying like more
and more charities are starting to go to the web
now exactly, And I think the web was capitalized and
maybe in quotation marks and then in parentheses afterwards it
(23:11):
said the Worldwide Web. Um. Um, if you want to donate,
you can give cash. If you're walking by a Salvation
Army Santa Claus, you can't. I mean, it's a way
to go. You can throw your change in the bucket
if you've done the work. Though you're looking at Form
nine nineties and stuff like that, that's probably supplemental to
(23:32):
the actual charitable giving you're doing. So if you are
like really seriously philanthropic, like it's a pastime of yours
or a tax strategy as we'll see, Um, you you
will probably want to write checks because they're good records
that you want to keep. You might want to go
down to your bank and get the canceled check after
(23:53):
it's been cashed and um keep it in a safe
deposit box. Yes, Or because seven you can donate on
the internet with your credit card. Yeah, I hear. More
and more charities are going to the web and they're
just as many records as if you wrote that check,
and it's all very legit these days. UM, probably don't
(24:13):
need to worry about it unless, I mean, if you
can't tell the difference between a reputable website at this point,
then you know you're one of those people that falls
for the Nigerian scam, I guess, but I feel bad
for these people if it's all like making fun, But well,
go listen to the con Artists episode. That will be helpful.
Maybe that's a companion this one. Sadly, UM. You can
also if you are loaded, or if you really don't
(24:36):
like your family, you can leave UM money, land, goods,
your oldsmobile, all those things to charities still take them.
Maybe I'll will the my squatted land with that too.
That would be very nice. Maybe like thanks for this
thing that we can do nothing we have to mow
(24:57):
this and Josh the final way, is UM really popular
these days donating UM old things that you don't use anymore? UM.
And you know, we've been doing this forever in terms
of like furniture and clothing and stuff like that, but
nowadays things like computers, as we mentioned in a recent
listener mail or an upcoming listener mail which you're still
(25:18):
trying to get yeah about UM donating old computers to
this group in Athens, Georgia. But there are lots of
organizations that do that now. You can donate your car
right that off. UM office supplies, building materials, emergency supplies.
Those are huge obviously when catastrophe hits. Yeah, when the
poop hits the fan, that's right. And you can write
(25:40):
most of this stuff off as well. You can't, um,
you can write off the fair market value of it.
And if you go to an auction and you pay
way more than some something's worth, you can write off
whatever you paid over and above the fair market value
of that thing. The sucker fee, I the philanthropic fee. Well,
(26:02):
that's nice that they give it back, like, well, you
were sorted an idiot for paying that much money, But
go give it away and we'll at least let you
write it off. Okay, you want to talk about tex
stuff now? No, Well we're about to. So, uh there
are two kinds of UM. Well, there's there's three kinds
according to the UM I R S the tax Code,
(26:24):
the U S tax Code. There's three designations and then
a few subdis designations which we'll get into to the letter.
It's the sexiest publication on the planet, UM the tax
code for a charitable organization, right, fifty shades of green,
that is what they should call it the most Have
you read that? Now? Emily didn't? What did she say?
(26:44):
She likes sweating all the time. Yeah, I mean it was.
It was pretty racy. That's crazy. She blew through the
series and you know, a couple of weeks that person
was earning like a million dollars a day or something
some crazy amount from that for weeks for writing smut.
I guess good for her. It was a lady, right, Yeah,
but she's got a man's name, Frank, no initials. That's
(27:07):
very mask in my opinion. J. K. Rowling sounds like
a dude. You think. I never really thought about it.
And isn't it like P. D. James? It almost sounds
like pet anyway. UM. The three tax codes, yes, So
the one that everybody's heard of, it, it's most familiar
(27:27):
with is the five oh one C three. You know
you've heard of a five oh one C three corporation.
Don't pretend like you haven't, Like you're too cool to
know about. There's the three, four, and five. Your favorite,
I guess is the three. So the five one three,
that's the Yeah, that's the that's the money organization. That's
the one that's like, UM, it covers that. Let's see
prevention of cruelty to children or animals, those kind of organizations,
(27:51):
UM educational UM, charities straight up charity charities that helped
like the poor and the needy, religious charities, scientific organizations
yea yeah, um favorite ones that support national or international
amateur sports, which is pretty sweet. Yeah, you can give
(28:11):
like to the USK team, right if Don King's involved, though,
do not you don't look for a text deduction at
the organization. Um. And then uh testing related to public safety,
which I was trying to figure out what that would be. Yeah,
I don't know. Maybe an organization that goes around sitting
off incendiary devices and fallout shelters to see if they
(28:35):
hold up. Yeah, I'm not sure. I was gonna say,
like auto safety, but it seems like that would be
the auto companies privately doing that. There are like the um, yeah,
there are, That's what it is. So anyway, um, all
of those except for the public safety one you can
write off like without thinking twice without prejudice. Yeah yeah right, Um,
(28:58):
unless these any that that is a not for profit
or nonprofit corporation that's overseas, yes, and it means that
they're based overseas, uh not necessarily that they do most
of their work overseas, right, that's where they're they're incorporated
is overseas. Yeah, because COED for instance, that's why I
(29:19):
mentioned it. They are based out of Cincinnati, even though
the work they do is usually in Guatemala. Right, that's
an excellent point. Yeah. Um, so that's the five oh
one C three. You've got public charity, UM, you've got
the private foundation. And a private foundation is UM. It
gets its income from investments, endowments, and then it's basically
a charity for other charities yea. Then grants that to
(29:42):
whoever they see fit, right. And that's a good one
to invest in UM because they are they usually know
exactly what they're doing more than you you know, and
they're like their whole their work is charity, so like
they're looking for up and coming ones once they're doing
really great work, that kind of stuff. What's well Mann
that kind of thing. Uh. And then you have a
private operating foundation, right, Yeah, and they donate to directly
(30:07):
to the causes UM instead of granting uh grants to
other charities. The private foundation. If you give to one
of those, you may not necessarily be able to deduct it,
but a public charity or a private operating foundation, most
of the time you'll you'll get the full deduction. I
think that's up to about fifty of your adjusted gross income.
(30:29):
So if you make fifty dollars and you donate five thousand,
you can write that off. It'll take that right away.
That's that's a pretty good tax strategy. It is incorporations
can um are allowed to deduct all contributions up to
usually about ten percent of their taxable income, which that's
(30:52):
where it ends. But I mean, think about it. What
about corporations that like have zero taxable income, like because
of their fancy accounting like to they donate at all?
I don't know. I have a big question about that.
And that was quite cynical there, and I don't like cynicism.
I said, that's probably where they stopped donating, is when
they reach that threshold. Not necessarily true, but you know,
(31:15):
maybe this well, you know, the the text the deductible
charitable contributions as it stands now is kind of under
threat actually because the Bush tax cuts are going to expire.
Possibly if the Bush tax cuts expire, then um for
the for those highest income brackets, they'll lose about eight
(31:39):
percent of their UM deduction abilities, which I would think
would show a pretty steep drop in charitable giving in
that tax bracket. Yeah, and even though it's only five
that's you know, still how much was it? Like fourteen
billion dollars? And then Obama has a proposal that I
don't know if it's going anywhere or not to basically
(32:00):
like set of your adjusted gross income is the maximum
you can deduct for higher income tax brackets. Yeah. I
don't know if it will go anywhere though, but we
may see charities like really getting hurt in the future.
I'm so ambivalent right now, you're not You're angry behind
(32:21):
the ambivalence. What about the C four Oh boy, the
C four that that covers um that covers organizations that
lobby on behalf of specific causes like social welfare and
stuff like that. Uh yeah, so remember, um, there was
a big how about but I can't remember. I couldn't
(32:43):
remember it before and I can't remember it now. It
was a lobbying group that had five oh one C
three status. No, but yeah, but it was they were
lobbying from behalf of social values. Remember McDonald's got called
out and like left, like all these huge corporation is
like left this lobbying group. It was like a chamber
of commerce, arm and somehow they have five three status.
(33:06):
It was a big call for them to to go
back or to be forced into which would mean a
lot they'd have to pay taxes. That also will include
volunteer fire departments, which I thought was interesting, and civic
organizations and they are not deductible at charitable donations UM
to the C fours except for volunteer fire departments and
(33:29):
UM Veterans Organization. Yeah, exactly, So I guess you up
to the v A or the vf W v W
or the American Legion, maybe even the not the French
Foreign Legion though they're overseas. That's right. The C six, Josh,
the C six, that's that's actually I guess it should
be that that UM organ that lobbying group shouldn't be
(33:50):
a five on three. It should be a C six
because this covers trade associations and boards, chambers of commerce, UM,
real estate. Yeah, we can't forget those, and you can't
deduct any or any gifts to those as well. Basically
just five one three. And you want to make sure
it's not a private foundation and that's a private operating
(34:12):
and that's if you're donating money. But we mentioned you
can donate your time is a volunteer, which I think
it's kind of a neat way to go about it
if you're into like, you know, grassroots, hitting the ground,
getting your hands dirty. Um. They have figured out that
actually this article is I don't know, I'm sorry, I
have a new staff for that. They have figured out
(34:34):
that it is. UH. An estimated dollar value of volunteering
time is twenty eight an hour in two thousand nine. Wow,
that's great. And so in two thousand nine, the volunteer
time totaled about hundred and sixty nine billion dollars. I
wonder how much of that has wasted though, because there
in this article they cite ups Survey UPS Foundation. UM.
(34:57):
That was taken its back, but at the time they
found that like volunteers said that they stopped volunteering because
they felt that their time was wasted volunteering. Yeah. I
have had experience like that, UM, and I get it,
you know, because if you don't have a lot of time,
you're like, I want to give my time, you want
to have it be used. And I don't want to
(35:18):
call out who this was, but it was a group
in town. Volunteer showed up and like they didn't know
what to do with me, and I did it a
couple of times. They didn't know what to do with
me until Vince I was like, you know, I'm not
going to come back like sit around here. I'm gonna
go find somewhere else or maybe you should get your
act together a little bit more. Um. But it's tough,
you know. I mean, it's easy to criticize, it's tough
(35:40):
to manage volunteers. It's one of the most difficult I
think it said in the article one of the most
difficult parts of running one a nonprofit is is managing
and maintaining your volunteers because they Walton brand new and
I'm sure they want to be the one doling out soup,
you know, where we really need someone to lift those
boxes in the back um, which is unglamorous. It's unglamorous,
(36:03):
and so it's probably not the easiest thing in the
world to manage expectations and what they're supposed to be
doing and training and the like. You know, I got
some stats. Sixty of households give the charity UM average
household contribution two thousand, two hundred and thirteen UM. Majority
(36:24):
of charitable dollars went to religion, education percent, grant making,
nine percent, human services. It just says percent. They're like
making electricity with bodies. Yeah, I think that's exactly what
it is. Um. Ninety eight percent of high net households
give the charity, which is great, um and beneficial for
(36:46):
your tax status. I'm not saying it's why, but you
know it's good that that's there at least. And then
um six percent of people volunteer and those and religion
leads away again at which leads us to did you
read the article? I skimmed it. Yeah, let's hear what
(37:06):
you got to say. Well, Mitt Romney was criticized recently
because and this is criticism by Bill Maher, so take
it with a grain of salt. Um. But he counted
sixteen point five percent of his income his charitable donations, uh,
a lot of which went to the Mormon Church. So
that brings up an important thing tithing. If you are
(37:29):
a believer of the Bible, you were supposed to tie
off the top. It's off the top, is it? According
to the Reverend Wealth Joy? Okay, and UM, you can
write that off, which I didn't under I didn't know
that until today. I didn't either. Um, so Bill Maher
says that, you know, some churches and like these well
(37:50):
to do organizations like symphony orchestras, colleges and universities with
large endowments shouldn't count as charities any longer. So he's
kind of slinging some harsh words there. Um, but that
sort of says that the only people who can benefit
from charity or the poor. And that's just not necessarily
the case, because then you've got like hospitals and libraries
(38:10):
and museums and these other things. Um, animal organizations. Uh,
that would be thrown out under the Bill Maar model.
You know. Well, I mean all you need to do
is inject a little capitalism, like make the Humane Society
in the SPC a really kind of compete for money. Yeah,
the one left standing is the one that gets to survive. Um.
(38:33):
And uh, they did a study on church budgets and
two thousands, so this is not super updated. UM and
Christian Today did this and found that an average church
budget is about two dollars went to staff compensation for facilities,
sixtent for missions, nine percent for church programs, six for
(38:56):
admin and supplies, three percent for denominational fees, and three
for other handling handling fees, and uh, one of the
things that how much was that? How much of that
we really want to charity? Well, that's the thing though,
the church itself qualifies as a charity with its non
exempt status. So like I guess the six percent for
(39:19):
mission work would be charity, nine percent for church programs,
A lot of that could be charity. But one of
the issues is that, but is that also like the
music program. Well, that's what I'm saying. That's one of
the issues with with considering churches charities. And this is
written by a Christian organization saying that churches need to
(39:40):
get better about um connecting the giving to the outcome
because people like knowing like the literal outcome of where
I'm giving my money, whereas churches apparently are not very
good at tying that together. And it's really just like
it's your tithe it's just for everything, instead of it's
for this program, in this program, it's used in this way.
So you know the solution to that, what's that? Charging
(40:03):
admission to church? If you want to know more about
philanthropy or philanthropy, if you say things like a weirdo,
you can type that word into the search bar at
how stuff Works dot com. P h I L A
N T h R O p y philanthropy uh and
I say a handy search bar or search bar or
(40:23):
something like that, which means it's time for listener mayo
uh and live listener mail today. Oh goodness, since we're
covering philanthropy, we're gonna support co ED because we haven't
done it in a while. Okay, awesome, you want to
tell them about the organization, Josh. For those of you
who don't know, you can go back into the deep
(40:43):
archives and find our Guatemala Adventure Part one and two.
It's the I think one and only time you can
clearly here Jerry speaking. But we went to Guatemala to
see firsthand with the Cooperative for Education does. And what
they do is they take money UM from different donors,
basically pile it all together and buy enough books for
a class in Guatemala. Then those kids pay rent on
(41:06):
those books something that's affordable. It's like two bucks a
year or something like that UM that the average Guatemala
and family can afford fairly easily, and that goes into
pool helping nes grow. And then at the end of
that year or a couple of years or a few
years when the books are worn out, that that school
has the money to replace them. So it's a self
sustaining model. Um And basically you can help a kid
(41:30):
get out of poverty by getting an education where otherwise
they would be working in the field and making tortillas,
which we found out they do in addition to going
to school normally. So they do great work. We've seen
it firsthand. We stand very firmly behind this this organization. Yeah,
and not only they have a book program, any computer
lab program, so some of your money can go to
(41:52):
computer labs and and getting these kids not only computers,
but training, which it's the same model. It's just what
rather than like set a book, that's like a computer lab. Yeah, yeah,
pretty cool. Yeah, I mean stuff these kids have never
seen before, and they're and they're learning how to use computers,
getting better jobs. It's good stuff. Yeah. All right, So
you can visit uh Cooperative for Education dot org and
(42:14):
that's different from their old website. So go to Cooperative
for Education dot org and you can there's a donate
now button at the top right of the screen, or
if you want to go down there, you can go
on one of the tours. Tours, we've had some listeners
go yeah, um, Guatemala got under Jerry's skin. She she
became very very much involved with the co ED after
(42:35):
that first tripman returned several times and when she went,
she would go and there'd be stuff you should know,
listeners that went because they listened to the Guatemalan adventures.
That's right, um, and they for you can go February
nine or August six through eleventh to the Land of
Eternal Spring and you will not regret it. And again,
(42:55):
what's the website again? Cooperative for Education dot org. Okay, cool? Yeah,
go give your money is well spent there check out
their form. Yeah, or volunteer or help somebody, help help
a panhandler out who knows. Just be philanthropic not misanthropic. Right,
we need a T shirt that says that, I bet
(43:17):
there's one out there and hey chuck. Yeah, let's just
take this moment to wish everyone a happy Thanksgiving. Seriously,
I don't know if you have traditions like sitting around
the table and like telling each other what you're thankful for.
I like doing that. Maybe you don't even have family, yeah,
maybe you have no one in the world. Surely there's
(43:37):
something for you to be thankful for that. Yeah, dig
digne people, I'm thankful for that wall in that carpet square. Deep,
that's awful. Deep. Are you ready so after Chuck's speel
Uh yeah, whatever your tradition is, we hope you're safe
(44:01):
and toasty and happy and you have the warmth of
the Great Turkey in your spirit. That's good. Thanks. We
should make that our sign off every year for Thanksgiving. Well,
maybe we will, the great, great Warmth of the Turkey spirit,
the great the warmth of the Great Turkey in your
spirit or something like that. It could use a little
(44:22):
tinkering before we trade market. Agreed, let's get to work
on that. Okay. Well until then, Happy Thanksgiving everyone, be safe. Uh.
If you want to get in touch with us to
wish us Thanksgiving tidings, even if you're from Canada, which
celebrates Thanksgiving us some preposterously early time, right, We'll still
accept your tweets at s Y s K podcast, say
(44:45):
hi on Facebook, Facebook dot com, slash stuff you Should Know,
and as always, you can send us in electronic mail
to Stuff podcast at Discovery dot com for more on
this and thousands of other topics, visit how stuff Works
(45:06):
dot com, m
Welcome to you stuff you should know from house stuff
works dot com. Hey, buddy, if you don't mind if
I plug my November page real quick, please do. I
am growing a mustache this month for November for uh
for cancer research, specifically male prostate cancer research. That's right.
(00:26):
And you can donate to my team, which would be
pretty cool because you know, you get a free podcast
and it'd be nice to grow a little money towards
cancer research in the name of nice here, give him
some money. He's growing on facial here to help a
charitable organization engage in really important scientific research. That's right.
(00:46):
And you can go to mobro dot c O slash
Charles Bryant and that's my page, or just go to
the November site. Type in Charles Bryan in the search
bar and look for the picture of me. There's only
a couple of ups out there. Check's wearing a red shirt.
That's right. Yeah, um, so what is that again? That's
mo bro dot CEO slash Charles Bryant. Yes, thank you
(01:07):
in advance. Yeah, that's nice chucking All right, let's get
to it, hey, and welcome to the podcast. I'm Josh Clark.
With me is always Charles W. Chuck Bryant. Oh, hold
on a second, buddy, Yeah, I think you've got something
you need to say. Oh yeah, um, let's go ahead
and plug our buddies over at Science Channel, our other home. Yeah. Uh.
Then they're airing punkin Chunking, the annual awesome fest of
(01:30):
shooting pumpkins through the air as far as you can
and then making them explode on contact. It's pretty great. Yeah,
it's a it's a real thing. Uh. And then Science
Shane ghosts every year and films it and they air
it as what's become a Thanksgiving tradition. So they're gonna
air it this Thanksgiving November twenty two and a pm. Right,
(01:51):
that's right. And we are still waiting to get invited
to go chunk punkins ourselves. We got invited last year,
did we? I think so? Oh yeah, but it was
like you guys can come if you want, if you
happen to be in the Northeast. Yeah, but it wasn't like, uh,
I wanted a formal invitation to participate. Okay, I got you. Um,
and uh, if you are in the punkin Chunking, Uh,
then you might want to go online to check out
(02:14):
the road to punk and Chunking. That's already up. There's
some great video to search punkin p U n k
I N chunking c h U n k I n
and science in your favorite search engine and it'll bring
that right up. Uh, and don't forget November twenty two,
this Thanksgiving at a p m. On Science Channel, punkin
Chunking the tradition. Yes, all right, you ready now, I'm ready, okay.
(02:38):
Back today is our good friend and longtime producer Jerry. Yeah,
I alins we had the class machine. Yeah. Well, people
are slow clapping all across the world right now, right,
very sar Jerry, We're so like you're back so much.
Just let know a slow clap is meaningful, yeah, but
(03:00):
can very easily be turned sarcastic. Just kind of cut
your head, decide. And I wonder what the first slow
clap was in a movie? You know, such a trope
at this point, but I wonder who invented it. A
bet of that information is out there. I want to know,
don't you want to know? I'm sure some movie website
is probably tracked this down. First slow clap. Let's find it, everybody.
(03:21):
Well wait, oh wait, uh, we should probably just go
ahead and do let's do it, Um Chuck. Yes, have
you ever given money to somebody who did nothing for
you in return? Maybe didn't sell you a good or service.
I just gave him the money. What do you mean
just like uh someone panhandler, charitable organization? That's philanthropy. You're
(03:47):
a philanthropist. Did you know that? Like that's all it takes.
And even better, this is the bright shiny episode. In
my opinion, I'm proud of this one. Um, have answer,
p works. You don't even need money, donate your time.
Your time is very valuable, Chuck. Yeah, And I think, well,
(04:09):
I can't say this because I'm just speculating, but it
seems to me that people are either like you know,
my my time is too valuable, but like I can
write someone to check yeah, or like I'm a little
light but I can't give my time. Or you can
put it like, well, the government doesn't let me deduct
time that i've donated, but they will let me deduct
the hundreds of thousands of dollars i've donated this year.
(04:31):
They should let you deduct time because they've actually figured
out I have like averages, like an hourly wage, volunteerism. Yeah, nice,
that would be awesome. Let's get that in the tax code.
That's a great idea. UM. You can, however, like if
you were, say, um, donating your time by going down
to like Louisiana to help clean up after a hurricane,
or Kansas or Missouri to help clean up after a tornado,
(04:56):
and you like bought a bus ticket or you drove,
you can deduct transportation and costs. But once you get there,
the government doesn't care about you. But you candiduc money
as far as transportation. Oh and just regular contributions, right.
It depending on on who you give to. And we
(05:16):
have a very thrilling segment in this episode about the
tax code, um, the ins and outs of it. Chuck
is not very excited about it. I think this is
kind of neat um. But we're talking about philanthropy and
it's kind of become I don't want to say vogue.
Maybe it has for the ultra rich, some of the
richest people in the world, at least the richest people
(05:37):
in America, like Bill Gates, Warren Buffett yea to sign
a pledge that Bill Gates created, the Bill and Melinda
Gates Foundation created this thing. Saying, hey, we're going to
donate at least half of our vast wealth, and they're
trying to sign billionaires up to agree to this and
then we'll just be super super super wealthy. Well, the
(06:00):
Bill and Melinda Gates Foundation is this like superstar foundation
that was like in the assets that controls is like
the GDP of several nations. That's pretty amazing. It's like
thirty seven billion dollars in assets right now. You can
do a lot of good with that. And one of
the people they signed on was Warren Buffett, and he's
worth forty nine billion dollars right now. He's pledged of
(06:21):
his fortune to the Gates Foundation afterward after he's dead,
which I mean he's getting up there. So they may
have about eighty billion dollars in assets in their control,
which is a well, I was gonna say that's almost
as much. It's about three quarters of the assets are
the value the capital value of the most valuable corporation
(06:43):
in the world, Apple, which ironically had a founder who
may have never given a cent to charity. Oh really,
Steve Jobs died without officially having given any money to
charity at all. Any He was notoriously stingy, and after
his death there is a lot of talk like, Okay,
(07:04):
did he did he really amass an eight billion dollar
fortune and not donate any of it, And a lot
of people were like, you know what, even if he didn't,
you know, to heck with you, he gave this technology
to the world and people are using it to better humanity. Well,
he doesn't need to give money. And other people are like, yeah,
if you have eight billion dollars in personal wealth, you
(07:25):
need to give some of that for other things like
water and stuff that you can't use an iPhone app for, right, Sure,
I guess it depends on how you feel about it all.
And then there was another camp that was saying, hey,
it's totally possible that he was just not a jerk
and he donated a lot of money, But he did anonymously.
He didn't want a bunch of glory or he didn't
want a bunch of charities knocking down his door like, hey, hey,
(07:48):
give us some too, for whatever reason. But you're saying
that did not happen. He didn't give anonymously. No one knows.
It's a mystery. Oh, I thought you said for sure
he didn't give any money ever, because he was so
cheap on paper. Oh there is no no record of
him ever giving a cent to charity, but it's pretty
pretty interesting, Like I can't imagine having a billion dollars
and not giving any of it away. But he Bill
(08:10):
Gates approached him and he's like, nah, I'm not signing
that pledge, and will you pick up the check? Right?
Exactly right? Yeah, it's like I don't validate parking you again.
I remember um Ted Turner kind of was one of
the original guys to give a ton of money. When
he gave the billion to the un I remember that
was a really big deal at the time. Yeah, I
don't know that he gave it to the u N
(08:31):
What do they do with it? I don't know, because
just they went in the general fun I guess so.
But it was a big deal of the time. This
was a long time ago, but like in the seventies
or eighties, no nineties. I don't have to look, but
it was long enough to go. I go such that
it was a really big deal that someone gave a billion,
A personal individual gave a billion dollars. I think at
(08:52):
the time it might have been the largest individual donation.
That's crazy. That's neat. I like that though, cool guy. Yeah. Um.
But this whole thing, this trend that's going on among
the uber wealthy um is kind of this throwback to
the beginning of the last century when like the Rockefellers,
(09:13):
um and the Carnegies were setting up foundations that are
still around today. Yeah, the Ford Foundation, the UM what
the Rockefeller they created like a bunch of different trusts
Dirty Rock. Yeah, University of Chicago. That was another thing
that was invokes setting up huge universities, Cornell, Sanford, all
(09:36):
those were rich people endowing universities. It was like there
wasn't a university. Therefore, now there is. What's the one
you always here on NPR, the Ford Foundation, the Joseph
and Catherine. Man, it's so in my consciousness, I can't believe.
I can't just split it up. You know, one of
(09:58):
us will shout it in about forty five Yeah, exactly, okay,
But anyway, so um, Yeah, you usually associate philanthropy with
the uber wealthy, but it doesn't have to be. You
can be poor and as a matter of fact, the
poorest Americans contribute the highest percentage of their income of
any income bracket in the country. Did you know that? Yeah?
I did. And in fact, if the richest people contributed
(10:20):
that same percentage, then um, there would be fewer problems
in the world. I would say, So, you know, but
the rich people give the most because they have the most. Yeah,
I've got stats, but we'll get to those later. Well,
let's talk about a couple of stats. How many charities
are there in the country. Well, this says six hundred
thousand in the article. I think it's a little out
of date, is it? Because I found um, in two
(10:43):
thousand eleven there are approximately one million, eighty thousand, one
thirty charitable organizations. Um. This says that was a decrease
from so maybe this counts. Maybe this only counted, although
this is it counts foundations. Yeah, I think there was
an enormal increase. Yeah, because I have the feeling that
this article is written about two thousand three. Okay, well
(11:06):
that that would be a real big increase in a
million a million plus. So, um, three hundred and fifty
five of which are religious congregations, which we'll get into
that three thousand, um, and then uh, in the United
States and two thousand eleven charitable giving total two hundred
(11:27):
ninety eight billion dollars. Yeah. Um, and that was an
increase from two dozen ten, which saw two six billion dollars. Yeah,
two hundred and seventeen from individuals, which is pretty amazing
that se of all charitable gifts are from people. And
if you factor in bequests like people's leaving stuff in
their wills, which is also individuals and family foundations, it
(11:51):
rises to eighty eight percent and more than that, I think.
And then I saw percent on philanthropy dot com, the
Chronical of Philanthropy. Uh well, I have foundations at fourteen percent,
bequest at eight percent, and in last place corporate donations
at five mm. Apparently they get the least. And you
know what I just heard the other day. I don't
(12:12):
know if this is true. Maybe we can get confirmation.
You know, when you go to the grocery store and
they ask you to would you like to donate to
marchup dimes or whatever like on your thing? Yeah, where
is this coming? A listener about this was that? Yeah?
I think maybe that was it. Someone said that they
call those donations under their companies, under their corporation, and
(12:36):
like like you know, the grocery store donated that money
and gets the tllions of dollars and gets a text deduction.
And so I'm not saying you shouldn't do that, but
it's just something to consider for sure. Let's say let's
say you're like, no, I'm not giving a cent to
March of Dimes. Premature babies can all like um, And
then but you really really care about muscular distrophe. So
(12:58):
the time when they hit you up for that sham rock,
be like, of course, not only will I give one dollar,
will give five dollars? Well t s for you because
you have no say whatsoever and where that money is going.
Because they pull it all together in a plot that
they shell out quarterly or annually, and then they take
the tax reexplot. Whoever wrote that in um, like, I've
stopped all together giving it a grocery store now, like
(13:20):
I don't even consider I don't even feel bad saying no, Now,
yeah I have. I have kind of stopped doing that too,
just because if you're gonna give money, that will explain
you should take the time to research and do it
in a way that you feel good about and it's
responsible and that you know where the money is going
and all that stuff. Let's talk about that buddy. Um. Well,
(13:40):
one thing they point out early in the in the
article though, that we should say is that these days
more and more nonprofits are seeking funds in different ways
because um, a lot of government funding is declining and
uh going away all together. So they need money more
than ever. Uh and costs are going obviously. So that
(14:01):
is why you will see websites and billboards and door
to door and flyers and everything to get in touch
with the potential. Uh. Don't donate or don't or don't
or right, that's a good thing. They wrote. A word
means that. Uh. But like you said, philanthropy doesn't have
(14:22):
to be just about money. No it doesn't. But the
word philanthropy means that you love humans. Phil means loving
anthrope or anthropo or anthropy is humankind. So you love
human kind by giving money to it. That's how you're
demonstrating your love of humankind. Um. Checking out charity. So
(14:43):
this is a big one. It's a big deal. I
don't know how many people do this. I think, I
don't know. I want to say I don't you know,
but I mean, like normally the charitable giving I do
is like, you know, whoever's bringing the Bell at that
moment or something like that, or it was UM or
(15:05):
it's on an individual basis, like it's not necessarily through charity, right,
I hear you. UM. They say there are a few
guidelines you can look for if you're checking out a
charity to judge whether or not you think they're you know,
spending money wisely, UM generally fifty of every dollar should
go to the actual work the charity work, right, and
(15:27):
then the other remaining for operational marketing administrative costs. So
I I from what I saw, that's a very generous
towards the charities. Percentage I saw of your costs for
UM administration and fundraising should go to programs. But that's
(15:49):
charity choices dot com that says that that's probably the ideal. Yeah,
I'm sure. I think that the sixty cents is like
anything less than this and you should really like examine.
It means there's people at the top taking a big
paycheck or they're not doing a very good job of
managing their money. But it could also mean that if
you look at the age of the charity or the
size of the charity, like there's an economy of scale
(16:12):
in raising money. So if you, if you are established,
you have an established name, or you've been doing this
a while, your your phone raising costs are going to
be lower than say a new charity or a radical
charity that that does controversial work, because they're gonna have
a harder time generating money. So just because their fundraising
(16:32):
costs are high, it doesn't mean that they're all like
just enjoying lavish tuxedo based parties. And that's where all
the money is based, rather than business casual based, rather
than turtlenecks and jackets based. If you want to find
out about a charity job in it, you can write
(16:53):
a letter to the local charity registration office, usually within
the state Attorney General's office, and six eight weeks later
you might get a letter back. These days, you can
go online and uh, I went online actually today and
registered with guide Star and there's a charity. No has
the money started coming in? Um No. Guide Star is
(17:15):
one of the places you can go to check out
other charities, and you have to register to log in.
And because I wanted to check out, you know, like
our friends at Cooperative for Education. Yes, like all the
records are there for what you're looking for. I looked
at it text form, and you know what my first
thought was, Man, I feel so bad that Joe and
those guys have to fill this thing out every year. Dude,
(17:39):
it was so long, and but they don't have to
file taxes. So yeah, true whatever, it's all awash, right,
but you'll be glad to know they're you know, obviously
doing great work. They're on the up and up. We
knew that, Yeah, we definitely didn't know that. We saw
it firsthand the the we checked those guys out personally,
I stand behind Cohen. Uh. The Center for Better Better
Business Bureau, it's another place. The Foundation Center is another place,
(18:03):
and you can get basically have access to the numbers
if you really want to check it out thoroughly. Right,
So the form is gonna have like a general description
of the work they do, the programs they do, who's
running the thing, where their money is going? Uh? And
I think it gets a little more specific than just
like programs fundraising an administrative costs. Right, doesn't it break
(18:26):
it down a little more like there's had all the
different you know drives that they did, and it broke
it down specifically to you know, if you were into
looking all that stuff up. It's there, right, and I
mean like if you really want to know, I mean
if you give to like a mega charity like the
Salvation Army in the United Way or something like that.
Like they have more than than just one program, so
(18:49):
they may be doing work that you don't necessarily agree with.
So there's another reason to go look at for um
because you'll see what what programs they're carrying out, like
all of them. Yeah, well that's what the Common Foundation
got in hot water, remember with the whole plan parent
a thing last year or was that early this year?
It was so at some point in the recent past. Yeah,
So that's you know, there's when you get that big.
(19:11):
There are other associations you might want to know about. Yeah,
depending on your your affiliation, you're socio political affiliation, that's right. Uh.
There's about three ways that they're going to be spending
their money though program services, and these are what you
want your money to be going to most. If you
want to just feel better about yourself at night, you
(19:32):
don't want to think paid the water bill there at
the building. You want to think I've put a sandwich
in a needy kid's hand a good one too. Uh.
Management operational costs is next. Like I said, it's a
little less exciting to think about that, but they need
to pay their rent and bills, definitely they need. And
then you've got fundraising, yeah, which can really rack it up.
(19:54):
I mean it's everything from like direct mailer's too lavish parties, um,
if you're courting celebrities and they like that kind of thing. Um.
And a well run, well managed charity can take you know,
X number of dollars whatever they're they're fundraising costs are
and grow it exponentially, use it correctly. But there's also
(20:15):
charities out there that don't know what they're doing and
shouldn't get the same funding. If you've got over a million,
there's bound to be a handful that aren't quite right,
you know, and some that are outright scams. Yeah, unfortunately,
and I think we have one of those, don't. Well.
There was a guy, um in this article, there's a
guy in Texas who after a tornado I think hit Austin,
(20:38):
he set up a charity that asked people the mail
one dollar donations checks made out to cash and mail
him too this po box and people did. He kept
the money. Unsurprisingly, there's just there's a bad place for
those people in their next life. Drifters. It's about the
worst thing you can do. No one likes you when
(20:58):
you're a grifter. Other grifters don't like you. Sure they'll
make movies about you, but I mean, like that's about it, Josh.
How would you go about so listening money if you
were a charity, if you're a nonprofit, well not for profit, Well,
one of the things I would do is probably take
some of my initial UM money, my initial capital, and um,
(21:21):
I would buy some mailing lists of other donors from
other charities, which is extremely common practice these days. Yeah,
I wonder what kind of money to make doing that. Well,
that's that's one reason they do it. They they like
a charity, will will compile a mailing list and they'll
sell it to other charities for income. Um. Yes, and
again it's kind of practice. Uh. They also, um will
(21:44):
sell them not necessarily just for the money. They may
swap them with other charities. Because if you've donated to
a charity, you've separated yourself I imagined from a lot
of other people. UM. And you're somebody who may be
willing to give money to a different charity. You two. Um.
So that's one way I would do a direct mailing.
(22:05):
I would hire a bunch of clean cut teenagers who
are enthusiastic about the charity that they represented, and send
him to the door clearly labeled through uniforms and possibly
matching khaki pants uh as representatives of the charity, complete
with identification, and lots of pamphlets about the programs that
(22:26):
we have. Wow, you're like, you have the starter kit
ready to go. It's I'm ready. I just need some
an injection of funding. I don't know the programs yet,
but everything else I've got lined up. Um. As this
article points out, if you are getting more solicitation than
you like, you can right the letter to the organization
(22:47):
requesting your name be removed. Um. It may or may
not work, and keep a copy of that letter, or
you can just go to their website and unsubscribe. Well
that was I think one of the things that gave
this away was like, um, the it's saying like more
and more charities are starting to go to the web
now exactly, And I think the web was capitalized and
maybe in quotation marks and then in parentheses afterwards it
(23:11):
said the Worldwide Web. Um. Um, if you want to donate,
you can give cash. If you're walking by a Salvation
Army Santa Claus, you can't. I mean, it's a way
to go. You can throw your change in the bucket
if you've done the work. Though you're looking at Form
nine nineties and stuff like that, that's probably supplemental to
(23:32):
the actual charitable giving you're doing. So if you are
like really seriously philanthropic, like it's a pastime of yours
or a tax strategy as we'll see, Um, you you
will probably want to write checks because they're good records
that you want to keep. You might want to go
down to your bank and get the canceled check after
(23:53):
it's been cashed and um keep it in a safe
deposit box. Yes, Or because seven you can donate on
the internet with your credit card. Yeah, I hear. More
and more charities are going to the web and they're
just as many records as if you wrote that check,
and it's all very legit these days. UM, probably don't
(24:13):
need to worry about it unless, I mean, if you
can't tell the difference between a reputable website at this point,
then you know you're one of those people that falls
for the Nigerian scam, I guess, but I feel bad
for these people if it's all like making fun, But well,
go listen to the con Artists episode. That will be helpful.
Maybe that's a companion this one. Sadly, UM. You can
also if you are loaded, or if you really don't
(24:36):
like your family, you can leave UM money, land, goods,
your oldsmobile, all those things to charities still take them.
Maybe I'll will the my squatted land with that too.
That would be very nice. Maybe like thanks for this
thing that we can do nothing we have to mow
(24:57):
this and Josh the final way, is UM really popular
these days donating UM old things that you don't use anymore? UM.
And you know, we've been doing this forever in terms
of like furniture and clothing and stuff like that, but
nowadays things like computers, as we mentioned in a recent
listener mail or an upcoming listener mail which you're still
(25:18):
trying to get yeah about UM donating old computers to
this group in Athens, Georgia. But there are lots of
organizations that do that now. You can donate your car
right that off. UM office supplies, building materials, emergency supplies.
Those are huge obviously when catastrophe hits. Yeah, when the
poop hits the fan, that's right. And you can write
(25:40):
most of this stuff off as well. You can't, um,
you can write off the fair market value of it.
And if you go to an auction and you pay
way more than some something's worth, you can write off
whatever you paid over and above the fair market value
of that thing. The sucker fee, I the philanthropic fee. Well,
(26:02):
that's nice that they give it back, like, well, you
were sorted an idiot for paying that much money, But
go give it away and we'll at least let you
write it off. Okay, you want to talk about tex
stuff now? No, Well we're about to. So, uh there
are two kinds of UM. Well, there's there's three kinds
according to the UM I R S the tax Code,
(26:24):
the U S tax Code. There's three designations and then
a few subdis designations which we'll get into to the letter.
It's the sexiest publication on the planet, UM the tax
code for a charitable organization, right, fifty shades of green,
that is what they should call it the most Have
you read that? Now? Emily didn't? What did she say?
(26:44):
She likes sweating all the time. Yeah, I mean it was.
It was pretty racy. That's crazy. She blew through the
series and you know, a couple of weeks that person
was earning like a million dollars a day or something
some crazy amount from that for weeks for writing smut.
I guess good for her. It was a lady, right, Yeah,
but she's got a man's name, Frank, no initials. That's
(27:07):
very mask in my opinion. J. K. Rowling sounds like
a dude. You think. I never really thought about it.
And isn't it like P. D. James? It almost sounds
like pet anyway. UM. The three tax codes, yes, So
the one that everybody's heard of, it, it's most familiar
(27:27):
with is the five oh one C three. You know
you've heard of a five oh one C three corporation.
Don't pretend like you haven't, Like you're too cool to
know about. There's the three, four, and five. Your favorite,
I guess is the three. So the five one three,
that's the Yeah, that's the that's the money organization. That's
the one that's like, UM, it covers that. Let's see
prevention of cruelty to children or animals, those kind of organizations,
(27:51):
UM educational UM, charities straight up charity charities that helped
like the poor and the needy, religious charities, scientific organizations
yea yeah, um favorite ones that support national or international
amateur sports, which is pretty sweet. Yeah, you can give
(28:11):
like to the USK team, right if Don King's involved, though,
do not you don't look for a text deduction at
the organization. Um. And then uh testing related to public safety,
which I was trying to figure out what that would be. Yeah,
I don't know. Maybe an organization that goes around sitting
off incendiary devices and fallout shelters to see if they
(28:35):
hold up. Yeah, I'm not sure. I was gonna say,
like auto safety, but it seems like that would be
the auto companies privately doing that. There are like the um, yeah,
there are, That's what it is. So anyway, um, all
of those except for the public safety one you can
write off like without thinking twice without prejudice. Yeah yeah right, Um,
(28:58):
unless these any that that is a not for profit
or nonprofit corporation that's overseas, yes, and it means that
they're based overseas, uh not necessarily that they do most
of their work overseas, right, that's where they're they're incorporated
is overseas. Yeah, because COED for instance, that's why I
(29:19):
mentioned it. They are based out of Cincinnati, even though
the work they do is usually in Guatemala. Right, that's
an excellent point. Yeah. Um, so that's the five oh
one C three. You've got public charity, UM, you've got
the private foundation. And a private foundation is UM. It
gets its income from investments, endowments, and then it's basically
a charity for other charities yea. Then grants that to
(29:42):
whoever they see fit, right. And that's a good one
to invest in UM because they are they usually know
exactly what they're doing more than you you know, and
they're like their whole their work is charity, so like
they're looking for up and coming ones once they're doing
really great work, that kind of stuff. What's well Mann
that kind of thing. Uh. And then you have a
private operating foundation, right, Yeah, and they donate to directly
(30:07):
to the causes UM instead of granting uh grants to
other charities. The private foundation. If you give to one
of those, you may not necessarily be able to deduct it,
but a public charity or a private operating foundation, most
of the time you'll you'll get the full deduction. I
think that's up to about fifty of your adjusted gross income.
(30:29):
So if you make fifty dollars and you donate five thousand,
you can write that off. It'll take that right away.
That's that's a pretty good tax strategy. It is incorporations
can um are allowed to deduct all contributions up to
usually about ten percent of their taxable income, which that's
(30:52):
where it ends. But I mean, think about it. What
about corporations that like have zero taxable income, like because
of their fancy accounting like to they donate at all?
I don't know. I have a big question about that.
And that was quite cynical there, and I don't like cynicism.
I said, that's probably where they stopped donating, is when
they reach that threshold. Not necessarily true, but you know,
(31:15):
maybe this well, you know, the the text the deductible
charitable contributions as it stands now is kind of under
threat actually because the Bush tax cuts are going to expire.
Possibly if the Bush tax cuts expire, then um for
the for those highest income brackets, they'll lose about eight
(31:39):
percent of their UM deduction abilities, which I would think
would show a pretty steep drop in charitable giving in
that tax bracket. Yeah, and even though it's only five
that's you know, still how much was it? Like fourteen
billion dollars? And then Obama has a proposal that I
don't know if it's going anywhere or not to basically
(32:00):
like set of your adjusted gross income is the maximum
you can deduct for higher income tax brackets. Yeah. I
don't know if it will go anywhere though, but we
may see charities like really getting hurt in the future.
I'm so ambivalent right now, you're not You're angry behind
(32:21):
the ambivalence. What about the C four Oh boy, the
C four that that covers um that covers organizations that
lobby on behalf of specific causes like social welfare and
stuff like that. Uh yeah, so remember, um, there was
a big how about but I can't remember. I couldn't
(32:43):
remember it before and I can't remember it now. It
was a lobbying group that had five oh one C
three status. No, but yeah, but it was they were
lobbying from behalf of social values. Remember McDonald's got called
out and like left, like all these huge corporation is
like left this lobbying group. It was like a chamber
of commerce, arm and somehow they have five three status.
(33:06):
It was a big call for them to to go
back or to be forced into which would mean a
lot they'd have to pay taxes. That also will include
volunteer fire departments, which I thought was interesting, and civic
organizations and they are not deductible at charitable donations UM
to the C fours except for volunteer fire departments and
(33:29):
UM Veterans Organization. Yeah, exactly, So I guess you up
to the v A or the vf W v W
or the American Legion, maybe even the not the French
Foreign Legion though they're overseas. That's right. The C six, Josh,
the C six, that's that's actually I guess it should
be that that UM organ that lobbying group shouldn't be
(33:50):
a five on three. It should be a C six
because this covers trade associations and boards, chambers of commerce, UM,
real estate. Yeah, we can't forget those, and you can't
deduct any or any gifts to those as well. Basically
just five one three. And you want to make sure
it's not a private foundation and that's a private operating
(34:12):
and that's if you're donating money. But we mentioned you
can donate your time is a volunteer, which I think
it's kind of a neat way to go about it
if you're into like, you know, grassroots, hitting the ground,
getting your hands dirty. Um. They have figured out that
actually this article is I don't know, I'm sorry, I
have a new staff for that. They have figured out
(34:34):
that it is. UH. An estimated dollar value of volunteering
time is twenty eight an hour in two thousand nine. Wow,
that's great. And so in two thousand nine, the volunteer
time totaled about hundred and sixty nine billion dollars. I
wonder how much of that has wasted though, because there
in this article they cite ups Survey UPS Foundation. UM.
(34:57):
That was taken its back, but at the time they
found that like volunteers said that they stopped volunteering because
they felt that their time was wasted volunteering. Yeah. I
have had experience like that, UM, and I get it,
you know, because if you don't have a lot of time,
you're like, I want to give my time, you want
to have it be used. And I don't want to
(35:18):
call out who this was, but it was a group
in town. Volunteer showed up and like they didn't know
what to do with me, and I did it a
couple of times. They didn't know what to do with
me until Vince I was like, you know, I'm not
going to come back like sit around here. I'm gonna
go find somewhere else or maybe you should get your
act together a little bit more. Um. But it's tough,
you know. I mean, it's easy to criticize, it's tough
(35:40):
to manage volunteers. It's one of the most difficult I
think it said in the article one of the most
difficult parts of running one a nonprofit is is managing
and maintaining your volunteers because they Walton brand new and
I'm sure they want to be the one doling out soup,
you know, where we really need someone to lift those
boxes in the back um, which is unglamorous. It's unglamorous,
(36:03):
and so it's probably not the easiest thing in the
world to manage expectations and what they're supposed to be
doing and training and the like. You know, I got
some stats. Sixty of households give the charity UM average
household contribution two thousand, two hundred and thirteen UM. Majority
(36:24):
of charitable dollars went to religion, education percent, grant making,
nine percent, human services. It just says percent. They're like
making electricity with bodies. Yeah, I think that's exactly what
it is. Um. Ninety eight percent of high net households
give the charity, which is great, um and beneficial for
(36:46):
your tax status. I'm not saying it's why, but you
know it's good that that's there at least. And then
um six percent of people volunteer and those and religion
leads away again at which leads us to did you
read the article? I skimmed it. Yeah, let's hear what
(37:06):
you got to say. Well, Mitt Romney was criticized recently
because and this is criticism by Bill Maher, so take
it with a grain of salt. Um. But he counted
sixteen point five percent of his income his charitable donations, uh,
a lot of which went to the Mormon Church. So
that brings up an important thing tithing. If you are
(37:29):
a believer of the Bible, you were supposed to tie
off the top. It's off the top, is it? According
to the Reverend Wealth Joy? Okay, and UM, you can
write that off, which I didn't under I didn't know
that until today. I didn't either. Um, so Bill Maher
says that, you know, some churches and like these well
(37:50):
to do organizations like symphony orchestras, colleges and universities with
large endowments shouldn't count as charities any longer. So he's
kind of slinging some harsh words there. Um, but that
sort of says that the only people who can benefit
from charity or the poor. And that's just not necessarily
the case, because then you've got like hospitals and libraries
(38:10):
and museums and these other things. Um, animal organizations. Uh,
that would be thrown out under the Bill Maar model.
You know. Well, I mean all you need to do
is inject a little capitalism, like make the Humane Society
in the SPC a really kind of compete for money. Yeah,
the one left standing is the one that gets to survive. Um.
(38:33):
And uh, they did a study on church budgets and
two thousands, so this is not super updated. UM and
Christian Today did this and found that an average church
budget is about two dollars went to staff compensation for facilities,
sixtent for missions, nine percent for church programs, six for
(38:56):
admin and supplies, three percent for denominational fees, and three
for other handling handling fees, and uh, one of the
things that how much was that? How much of that
we really want to charity? Well, that's the thing though,
the church itself qualifies as a charity with its non
exempt status. So like I guess the six percent for
(39:19):
mission work would be charity, nine percent for church programs,
A lot of that could be charity. But one of
the issues is that, but is that also like the
music program. Well, that's what I'm saying. That's one of
the issues with with considering churches charities. And this is
written by a Christian organization saying that churches need to
(39:40):
get better about um connecting the giving to the outcome
because people like knowing like the literal outcome of where
I'm giving my money, whereas churches apparently are not very
good at tying that together. And it's really just like
it's your tithe it's just for everything, instead of it's
for this program, in this program, it's used in this way.
So you know the solution to that, what's that? Charging
(40:03):
admission to church? If you want to know more about
philanthropy or philanthropy, if you say things like a weirdo,
you can type that word into the search bar at
how stuff Works dot com. P h I L A
N T h R O p y philanthropy uh and
I say a handy search bar or search bar or
(40:23):
something like that, which means it's time for listener mayo
uh and live listener mail today. Oh goodness, since we're
covering philanthropy, we're gonna support co ED because we haven't
done it in a while. Okay, awesome, you want to
tell them about the organization, Josh. For those of you
who don't know, you can go back into the deep
(40:43):
archives and find our Guatemala Adventure Part one and two.
It's the I think one and only time you can
clearly here Jerry speaking. But we went to Guatemala to
see firsthand with the Cooperative for Education does. And what
they do is they take money UM from different donors,
basically pile it all together and buy enough books for
a class in Guatemala. Then those kids pay rent on
(41:06):
those books something that's affordable. It's like two bucks a
year or something like that UM that the average Guatemala
and family can afford fairly easily, and that goes into
pool helping nes grow. And then at the end of
that year or a couple of years or a few
years when the books are worn out, that that school
has the money to replace them. So it's a self
sustaining model. Um And basically you can help a kid
(41:30):
get out of poverty by getting an education where otherwise
they would be working in the field and making tortillas,
which we found out they do in addition to going
to school normally. So they do great work. We've seen
it firsthand. We stand very firmly behind this this organization. Yeah,
and not only they have a book program, any computer
lab program, so some of your money can go to
(41:52):
computer labs and and getting these kids not only computers,
but training, which it's the same model. It's just what
rather than like set a book, that's like a computer lab. Yeah, yeah,
pretty cool. Yeah, I mean stuff these kids have never
seen before, and they're and they're learning how to use computers,
getting better jobs. It's good stuff. Yeah. All right, So
you can visit uh Cooperative for Education dot org and
(42:14):
that's different from their old website. So go to Cooperative
for Education dot org and you can there's a donate
now button at the top right of the screen, or
if you want to go down there, you can go
on one of the tours. Tours, we've had some listeners
go yeah, um, Guatemala got under Jerry's skin. She she
became very very much involved with the co ED after
(42:35):
that first tripman returned several times and when she went,
she would go and there'd be stuff you should know,
listeners that went because they listened to the Guatemalan adventures.
That's right, um, and they for you can go February
nine or August six through eleventh to the Land of
Eternal Spring and you will not regret it. And again,
(42:55):
what's the website again? Cooperative for Education dot org. Okay, cool? Yeah,
go give your money is well spent there check out
their form. Yeah, or volunteer or help somebody, help help
a panhandler out who knows. Just be philanthropic not misanthropic. Right,
we need a T shirt that says that, I bet
(43:17):
there's one out there and hey chuck. Yeah, let's just
take this moment to wish everyone a happy Thanksgiving. Seriously,
I don't know if you have traditions like sitting around
the table and like telling each other what you're thankful for.
I like doing that. Maybe you don't even have family, yeah,
maybe you have no one in the world. Surely there's
(43:37):
something for you to be thankful for that. Yeah, dig
digne people, I'm thankful for that wall in that carpet square. Deep,
that's awful. Deep. Are you ready so after Chuck's speel
Uh yeah, whatever your tradition is, we hope you're safe
(44:01):
and toasty and happy and you have the warmth of
the Great Turkey in your spirit. That's good. Thanks. We
should make that our sign off every year for Thanksgiving. Well,
maybe we will, the great, great Warmth of the Turkey spirit,
the great the warmth of the Great Turkey in your
spirit or something like that. It could use a little
(44:22):
tinkering before we trade market. Agreed, let's get to work
on that. Okay. Well until then, Happy Thanksgiving everyone, be safe. Uh.
If you want to get in touch with us to
wish us Thanksgiving tidings, even if you're from Canada, which
celebrates Thanksgiving us some preposterously early time, right, We'll still
accept your tweets at s Y s K podcast, say
(44:45):
hi on Facebook, Facebook dot com, slash stuff you Should Know,
and as always, you can send us in electronic mail
to Stuff podcast at Discovery dot com for more on
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