Sour economy mean fewer people donating cars to charity

This year fewer people are donating used cars, partly because the recession is forcing them to drive their old cars longer, while others turned their rusting wheels into the Cash for Clunkers program.

The dwindling number of car donations, while not a major source of revenue for most nonprofits, couldn’t come at a worse time. Charities nowadays need every penny as overall donations shrink and the need for their services grow in a bad economy. Those who run car donation programs say they typically see a surge the week after Christmas because people want to be able to claim the charitable deduction this year.

The Salvation Army estimates that vehicle donations and related revenue nationwide are down at least 25 percent this year.

At the Animal Rescue League of Boston, Susan Ruderman said car donations … took a “definite dip’’ during Cash for Clunkers this summer. During the federal rebate program donations dropped off by an estimated 70 percent.

Even before the recession and Cash for Clunkers, car donations started shrinking in 2005 when the Internal Revenue Service made it harder for those donating a vehicle to predetermine how much money they might get back on their taxes. Previously, taxpayers could deduct the “fair market value’’ of their car. But under current rules, deductions typically are limited to what a charity realizes from the sale of the car, and that amount must be verified by the charity beforehand.

The most recent data published by the IRS show that from 2004 to 2006, the number of income tax returns reporting used car donations dropped 68 percent.

Celebrity philanthropy

In one-on-one interviews with Elton John, Ben Stiller, Madonna, Martha Stewart and Richard Branson, in CNN “American Morning” series, “Big Stars, Big Giving,” Alina Cho looks at celebrity philanthropy and how big stars can make a big impact.

Alina Cho writes:

"There are many famous people who just talk the talk, and then there are those who walk the walk – and do it in other people's shoes. They are the ones who really give back, and their generosity is helping change the world.

"We begin on Monday with the man I call the "original" – Sir Elton John. In 17 years, his Elton John AIDS Foundation has raised more than $150 million with programs in 55 countries.

"On Tuesday I talk with movie star Ben Stiller. He's using comedy and social media to raise awareness and money to build schools in Haiti.

"Then Madonna in a rare one-on-one interview. She's building a school for orphans in Malawi. Then there’s Martha Stewart, who built a center for aging Americans. And last, but certainly not least, Sir Richard Branson – the man behind the "Virgin" empire. He treats philanthropy like a business – identify a problem and solve it."

US militarizing Afghanistan aid

Al Jazeera reports that a number of aid organizations working in Afghanistan have turned down funding from the US government as the money has strings attached to military operations.

Anne Richard, of the International Rescue Committee, told Al Jazeera: "Sometimes, military leaders assume that because we are in the same place, we share the same over-arching goals. … Our goal is to help the Afghan people - ideally, help themselves. The military's goal is to fight in a war and to provide security. … They are motivated by US national interest, we are motivated by humanitarian causes, humanitarian principals."

William Frej, the mission director for USAID, said: "Militarization of aid is a gross mischaracterization of what actually happens on the ground. Without [counterinsurgency] and without the military's support, many of the humanitarian agencies - such as Oxfam - that raise such complaints would not be able to enter the areas once controlled by insurgents."

Beyond risks of being closely associated with the military, aid organizations also argue that they are simply better at delivering aid. "I just don't think the military should be telling Americans if they want to work in humanitarian fields, they should go into the military," Richard said.

Growing Arab philanthropy

Between 2005 and 2008, the Arab world generated unprecedented wealth and created a new wave of rich citizens. This wealth creation is driving a new generation of Arabs to commit their resources to the development of the region. According to the 2007 World Wealth report published by Capgemini and Merrill Lynch, 7 per cent of the typical portfolio of a wealthy person in the Middle East is devoted to philanthropy.

A report by the John D. Gerhart Center for Philanthropy and Civic Engagement at the American University in Cairo says charitable giving is particularly high in Gulf Co-operation Council (GCC) countries. It puts annual philanthropic spending at about 1.5 - 2 per cent of gross domestic product. This makes the GCC one of the most generous regions in the world, as most countries give between 0.5 and 1.0 per cent of GDP.

Despite these developments, there are significant challenges facing philanthropists and charitable entities in the Arab world. Among them challenges unique to the region are the dominance of traditional models of giving and the association of philanthropy with terrorism. This has brought excessive scrutiny and caused many philanthropists and companies to avoid taking part in activities via institutionalized or publicized giving.

To pave the way for continued progress, Arab countries will need to continue to revamp regulations and policies governing philanthropy and charitable organizations.

Financial Times

The Great Recession hurting charitable giving

The “great recession” has crimped Americans’ giving to charitable causes. 2008 giving was already down from 2007, and will likely take a bigger hit this year. How long will this bad news continue?

If history is any guide, easy times for charities won’t return soon. Looking at individual giving after the Depression and the deep 1973-75 recession, a study by GivingUSA concluded that inflation-adjusted giving by households and individuals won’t reach their 2007 level until at least 2012, even if the recession ended in June.

If people are out of work, they are less likely to give as much.

“A lot depends on how the stock market does,” says Thomas Pollak, program director of the National Center for Charitable Statistics at the Urban Institute in Washington. The wealthy, many with stock portfolios, are a big source of charity.

Further, many nonprofits rely heavily on government funding – about 35 percent, on average, says Megan Haddock, international project coordinator at the Center for Civil Society Studies at Johns Hopkins University. So any cuts in government support for nonprofit groups, as a way of trimming federal spending, certainly won’t brighten this picture any.