I lived and worked in East Lansing from 1986 to 1989. I don’t remember what denomination the church was, but they used the flag thing in their advertising.
I’ve been back once or twice. I found out that the Grand Gourmet store in the Frandor shopping center closed, and I was bummed, even though I’m not up there anymore. And the Bagel Haul deli closed too, sob. But I hear Curious Books on Michigan Ave is still in business. Loved that store!
hijack /yep, Curious is still there, as well as Melting Moments Ice Cream. I, too, was bummed about Grande Gourment (wonderful place to buy cheese), but the writing was on the wall when the folks at Frandor decided to rent to World Market./hijack.
the ‘church w/all the flags’ is one of the “assemblies of God” churches (IIRC, the same ones that Jim & Tammy were from). I’m not their biggest fan in any event.
Very nice and good people can work for thieves. The word for them is “dupes.” There’s nothing wrong with it, thieves work hard to conceal their thievery and love to use the energy of good and honest people as cover.
But if good and honest people then KNOWINGLY work for theives, the word for them in “fools.”
“Fools” is a tad over-generous. The law tends to label them as, “accomplices.”
Baron_of_Graymatter wrote
If indeed very large parts of your contributions to your church don’t get used by the church, but are rather passed on to charities, then that’s wonderful and I applaud you and your church. I’m sorry to say I’m skeptical, though.
I will admit that the phrase “personal luxury spending” was a bit condescending, but it was technically accurate (Merriam-Webster: “luxury” = “something adding to pleasure or comfort but not absolutely necessary”).
Also, my reference to “un-christian” was not what what you claimed. I said
Which I stand by, and I think you probably do too. If one says in public, “I gave $6,000 to charity”, when in fact you gave less than $1,000, that’s just not in line with what I consider “good christian behaviour”. I happen to know a famous line out of the bible to back this up, but I’d rather not get into scripture debate.
Duke, I’m afraid your explanations are seriously flawed:
In the case of individuals and Charitable Gift Annuitys, your core explanation that “the CGA laws are complicated” is not enough. Give a concrete example of how an individual can give money and end up with more than before they give, and I will be happy to point out it’s specific flaw.
In the case of corporations:
I don’t mean this as insulting, but I’m sorry to say this explanation shows some lack of understanding of basic financial concepts. If a corp (or an individual, or any institution) has $10m that is put in any sort of investment where it can’t be utilized for other purposes, and at the end of 10 years, there is only $10m in that investment, money has been lost. They are not even; they have lost money, in this case $500k. The bottom line here is that the corp gave $500k of their hard earned money to a charity. The corp didn’t “lose almost nothing”; they lost $500k.
In the real world, Bill, if I have $10 million at the beginning of the year, and I have $10 million at the end of the year, I have broken even. I’m not sure what bizzaro world you live in, where all businesses are profitable and all investments make after-tax money. In my world, an investment where you neither make nor lose money is called “breaking even.”
Now, granted, I won’t be happy if my retirement plan only breaks even. But I’m a lot better off than the ex-Enron employees, wouldn’t you say? If my (say) $5,000 in my retirement plan becomes $5,001, I have “made money.” Not enough money for my liking, but I have made money.
You can’t say that a corporation “loses $500,000” when a foundation endowment makes 500K investment income, in any sense of the word. Semantically, it didn’t have the $500K in the first place, so it didn’t have it to lose. But, more to the point, that $500K investment is untaxed. In any other investment environment, the IRS would take a chunk out of the investment income. It’s moot to claim that a company “lost” money in that regard.
As for CGAs, hell yeah the laws are complicated. That’s why I’m a fundraiser, not a tax attorney. We, and just about every university less-well-off than Harvard, have to hire outside attorneys to sort out the mess. Essentially, though, CGAs are modified tax shelter investments. You might not earn as much as you would through investments in blue chips, but you won’t get socked with the same capital gains and (more importantly) inheritance taxes. (I should point out the the numbers I quoted were how far ahead our potential donor will come out “gross,” not “net.” The tax implications of a CGA are its real strongpoint.)
Ironically, I gave you a “concrete example” of how an individual can earn money. I can’t, because of donor confidentiality, go into any more details. (I can’t even tell you what stocks are at stake, because that may tip off who the donor is.) But if you can point out a “specific flaw” in a CGA, myself, the tax attorney, and Harvard will all be interested. CGAs and other planned gifts are our bread-and-butter. Unlike you, we deal with them every day.
And I find it ironic that you pressed me for “concrete examples,” when when we made the same request of you, you ducked it like a boxer on the ropes.
Duke wrote
I’m sorry, but you’re wrong. I’m also sorry to be so blunt and potentially insulting (as that’s not my intent), but if you ask any CFO they’ll back me.
If you put $10m (or $10) in the bank, and at the end of the year, you don’t have appropriate interest, you have lost money. Yes, the interest was given to a good cause, and that’s good. But it wasn’t free money. period. Again, I don’t want to be insulting, but this is incredibly obvious to any business person with financial experience.
And, friend Duke, your example of a CGA was not concrete. Here’s what you said:
a) you didn’t define “better off” for the donor. Did you mean that at the end of ten years, the donor will have $500k more in their own pocket than they do today?
b) you didn’t define “better off” for the recipient. Did you mean that you will receive $5.2m?
c) (and most importantly) what’s the rest of the story? This is a tiny fraction of things. Just saying “he wins 500k and I win 5.2mil” is too little information to be useful. How much money does the Donor have to put into escrow or investment or endowment? Do they give up access to that money for ten years? Forever? At the end of ten years are they again under your misunderstanding above where all they have is the original investment? Etc.
The fact of the matter is simple: If I give money to a charity, I lose money and they gain money. I can get some personal benefit in that my taxes are reduced, but almost never above my tax rate which maxes out around 35% for both corps and individuals. If you have magic to beat that 35 points, I’d love to hear it, as I give to charities both as an individual and as a CEO, and I’d love to find a way to get the charity more money on my donation. But I’m afraid I have reasonably competant tax people on the payroll, and I can tell you from some experience that what you’re claiming is dream material at best.
I understand why you take the stance you do, as in your role, it’s best to show the client how they can donate to your cause at lowest effect to them. But take it from one who writes the checks: what you’re describing is not real.
Bill H. - so you would say a company lost money if they spent $5 mill on advertising because, you see, that’s money the company don’t have and the agency does.
Maybe they are - try to wrap your mind around this - trading the money for other things of value! Investing in things like PR and networking advantages that will enable them to make more money in the future.
You don’t even have to factor in the tax advantages to see a benefit.
Bill H., why do you constantly refer to being “better off” in direct monetary units? What would you rather invest in: non-deductible advertising or deductible advertising? Corporate philanthropy has shown itself to be a shrewd business move, and one that is nearly essential in today’s economy. Charitable givings most certainly contributes to a company’s bottom line, but not necessarily directly. Name recognition, employee productivity, reducing regulatory obstacles and increasing inter-company relations are all improved by charitable giving.
Seriously, what shareholder is going to tolerate a company handing out its yearly earnings to charity without some form of reimbursement?
That “almost never” in there could prove your downfall, Bill. If I’m $100 over the breakpoint of my tax bracket, donating enough to bring me below that point will, in fact, make me money in taxes I don’t have to spend.
Hey, Bill, so long as you haven’t answered the question I, and several other posters, asked about how you “knew” about the giving overhead of churches, I feel under no obligation to answer any of your questions, the answers to which I am sure you will ignore anyway.
And, anyway, sure, any CFO will define “breaking even” as “making money.” I don’t think anyone else would, though.
Since when did that tax bracket go over 100%? You don’t seem to understand tax brackets. If your income goes above a bracket, only the income in the bracket gets taxed at that rate. And as long as the tax isn’t 100%, you won’t pay all the money in that bracket as tax. Hence, you can’t have more net by donating cash to charities. Ever.
True. I take that back.
Duke wrote
You’re certainly under no obligation to answer anything you don’t want to, but that’s not a reasonable rebuttal. And no, I won’t ignore what you say. You may want to investigate a term called “the time value of money”. Here’s a good introduction.
Ok, let’s for the moment throw aside what a CFO wants financially, and let’s talk about what you want financially.
Suppose I owe you $1,000 and I give you two choices:
a) you can have the $1,000 today, or
b) you can have the $1,000 (without interest) in ten years.
Which do you choose? Earlier you said these were identical for a corporation (except we were talking about millions of their dollars). Are they identical for you personally?
See what I mean? Please read the link above. It’s not too technical and it covers some good stuff.
I don’t have a source, though I have some personal experience with both charities (having done some volunteer work there in several capacities, including money management), and religions, especially the catholic church, where my sister has held jobs in various administrative roles, and I’ve seen vaguely into how money flows. Also, into religions I’ve been involved with directly and indirectly, where I’ve seen what’s been clear to me as very high overhead from a purely charitable perspective.
So, there’s your answer: I have no source, only modest experience. So I’ll ask you the same question. Do you have a source or other experience to dispute my stance?
j.c. wrote
All absolutely true. And in fact that’s the sort of thing that goes through a businessman’s mind when he makes a charitable donation through his business. (Hopefully – and I like to think typically – he also thinks of the good the money will do for those less fortunate, but let’s discard that for this discussion, as I was really responding to friend Duke’s assertion that there was pure financial benefit.)
Duke wasn’t clear what “better off” meant, and in fact I asked him for his definition. His implication was that it was purely a tax benefit and did not include advertising.
If in fact it did including advertising benefit, it’s only fair to ask “how much advertising benefit was expected?”, as that’s the first question a businessman would ask. I.e. if I give $1,000 to charity X, I’ll potentially receive (say) $800 in extra revenue as a byproduct, and also receive a $350 tax break, so I’ll really make ( -$1,000 + $800 + $350 = ) $150. However, if I give that $1,000 to a newspaper ad campaign, I’ll potentially receive $3,000 (or perhaps $300) in revenue. It’s not enough to say “you may get extra revenue by giving to charity.” There’s more to the picture.
Again, all of the above is purely from a financial perspective, as that was what I was responding to: Duke’s assertion that there was a purely financial benefit. He said:
and
I work in California. Recently at work we were encouraged to contribute to the United Way or some other Federation or charity of our choice. One of the sentences in the speech by the big cheese whose turn it was to be in charge of this charity drive was something like, “These are especially difficult economic times we are all going through, so it’s even more important for us all to dig deep into our pockets and help our community.”
Um, no. We’re not made of money. Yes, these are especially difficult economic times we are going through, especially for Californians what with the high PG&E bills and the tripled car tax. Don’t be surprised when some of us (who already donate to church or other favorite charity) won’t be able to cough up any money for the United Way or those other Federations this year. Some of us may be thinking that this year charity begins at home. Sorry, but it’s not a good time to try to hit us up for donations. Maybe next year if things are looking better.
10,000+ plaques is a lot of money wasted - why not just a nice letter with a gold star for the donating companies?
The time wasted to listen to the UW bs cost employers a fair amount too - or is that time deductible for the company?
HR is overstepping their bounds to track who’s participating.
Next they’ll be asking us to sponsor a child in some 3rd world country, while our family goes without.
As far as personal deductions - I don’t recall seeing any space on the IRS short form for charity donations.
Does United Way still give to the Boy Scouts? I don’t Give to any organazation that supports discrimination !!!
Spelling and gramer subect to change with out notice
I told you grammer was subject to change!!!
Here is a news article about that.