Report: Gilded Giving

For media inquires about this report, please contact Chuck Collins or Josh Hoxie


Gilded Giving: Top-Heavy Philanthropy in an Age of Extreme Inequality

Unprecedented levels of charitable giving in recent years mask a troubling trend. This report shows that charities are increasingly relying on larger and larger donations from smaller numbers of high-income, high-wealth donors. Meanwhile, they are receiving shrinking amounts of revenue from the vast population of donors at lower and middle-income levels. This trend mirrors the increasing concentration of wealth in larger society.

The report finds that this has significant implications for the practice of fundraising, the role of the independent nonprofit sector, and the health of our larger democratic civil society. The increasing power of a small number of donors also increases the potential for mission distortion.

This study tracks significant changes in philanthropic giving in recent years, puts forward a number of possible implications of these changes, and offers some solutions.

Key Findings:

  • Charitable contributions from donors at the top of the income and wealth ladder have increased significantly over the past decade. From 2003 to 2013, itemized charitable contributions from people making $ 500,000 or more—roughly the top one percent of income earners in the United States—increased by 57 percent. And itemized contributions from people making $ 10 million or more increased by almost double that rate—104 percent—over the same period.
  • The number of private grant-making foundations has shown similar dramatic growth. The number of grant-making foundations in the United States has doubled since 1993, from 43,956 to 67,736 in 2004, and to 86,726 in 2014. Between 2004 and 2014, the number of foundations increased 28 percent, and the amount of assets held in those foundations increased 35 percent.
  • Over the past ten years, charitable giving deductions from lower income donors have declined significantly, at almost the same rate that contributions from higher income donors have increased. While itemized charitable deductions from donors making $ 100,000 or more increased by 40 percent, itemized charitable deductions from donors making less than $ 100,000 declined by 34 percent.
  • The number of donors giving at typical donation levels has been steadily declining. According to one estimate, low-dollar and midrange donors to national public charities have declined by as much as 25 percent over the ten years from 2005 to 2015. These are the people who have traditionally made up the vast majority of donor files and lists for most national nonprofits since their inception.
  • The rate of decline in small-dollar donors correlates strongly with indicators of overall economic security in the United States, such as wages, employment, and homeownership rates. This correlation indicates that donor declines are likely due, in large part, to changing economic conditions.

Read the full report here [PDF].

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The post Report: Gilded Giving appeared first on Institute for Policy Studies.

Chuck Collins is the director of the Program on Inequality and the Common Good at the Institute for Policy Studies.
Helen Flannery is an associate fellow at the Institute for Policy Studies.
Josh Hoxie is the director of the Project on Opportunity and Taxation at the Institute for Policy Studies.


Under Armour Wants to Use Baltimore Tax Revenue Without Giving Back to the City

The entire city of Baltimore seemed to be cheering on Michael Phelps as he won his latest set of Olympic medals, continuing his reign as the most decorated Olympian of all time. No one can mistake Baltimore’s pride in our hometown hero. At the entrance to the city on Interstate 95, a giant billboard image of Phelps welcomes one and all.

That image is an advertisement for Under Armour, a brand almost as synonymous with Baltimore as our star swimmer. The major difference between the two? These days, Under Armour and its founder Kevin Plank are getting jeers from once loyal fans.

Why are Under Armour and Plank in such hot water? Sagamore Development Corporation, a company owned by Plank, is planning to revitalize a 260-acre stretch of former industrial land along Baltimore’s Inner Harbor into an exclusive “city within a city” that would house an expanded Under Armour campus. Plank’s one request to the city of Baltimore: To complete this massive Port Covington project, he’s asking for $ 535 million in “tax increment financing.”

If Plank gets these “TIFs” — a combination of upfront city bond payments and deferred property tax liability — his master plan wouldn’t add any new revenues to Baltimore’s tax base for another 40 years. On top of that, the Sagamore Development Corporation would be eligible for another $ 200 million in outright tax breaks.

Plank’s proposal comes with no binding commitment that the Port Covington project would create any affordable housing, hire locally, or promote local business development. What’s worse, his “city within a city,” local critics point out, would also put extra stress on Baltimore’s already underfunded schools, likely be inaccessible to current residents, and further segregate a Baltimore already deeply divided racially and economically.

Over recent years, Baltimore’s City Council has been greenlighting larger and larger TIF agreements and developer subsidies that have provided little if any public benefit. Observers expect the Council to approve the Port Covington plan early this fall, less than five months after its public unveiling.

Cities across the country have turned to similar TIF agreements and tax subsidies to attract big businesses and revitalize their urban cores. But studies and past experience have shown that these agreements do not serve the public interest. Plans like Plank’s have elsewhere generated few if any living-wage jobs for current residents and failed to create any appreciable wealth that trickles back into local communities.

Under Armour has built a compelling national identity around its Baltimore roots. Yet today the company operates just like any other multinational corporation. Baltimore has a skilled, experienced, and jobless industrial labor force. Yet all of Under Armour’s plants are located overseas, and no one at the company plans to move any of those jobs to its new Port Covington headquarters.

In his public outreach, Kevin Plank continues to claim that Under Armour remains committed long-term to Baltimore and the Port Covington project. His handshake agreements, vague promises, and hollow slogan, “We will build it together,” have enticed a few city residents.

But at a recent public hearing, Sagamore Development Corporation vice president, Caroline Paff, revealed Under Armour’s true colors on their future expansion.

“Development will happen here,” she not-so-subtly threatened, “or it will happen elsewhere.”

This sort of corporate strong-arming has become all too familiar in our modern age. Our contemporary urban development pits cities against one another, all to the benefit of a private corporate elite.

Instead of throwing our support behind large corporations that hold our cities hostage for subsidies and pledge allegiance only to shareholder bottom lines, we need to be investing in new sorts of participatory, community-driven development that circulates wealth back more widely throughout the local economy. And, in fact, Baltimore could learn some useful lessons from cities doing just that.

Cities elsewhere in the United States are now successfully building prosperity and a healthy tax base by encouraging cooperatively owned businesses and community-controlled housing. These cooperative enterprises are providing job opportunities in blighted communities often deemed too risky by traditional developers. Once up and running, they circulate money back into the local economy.

New York City has created a revolving loan fund that helps support new local businesses and gives them the tools they need to incorporate as worker-owned cooperatives. This fledgling new program has been so successful that the New York City Council has renewed and raised its funding.

Cleveland has developed what’s called an “anchor-institution strategy” that’s particularly relevant to Baltimore, a city with strong higher ed institutions — like Johns Hopkins and the University of Maryland — committed to making an impact in their communities. Cleveland’s Evergreen Cooperative took root when local hospitals and universities agreed to help catalyze new industry and purchase — on an ongoing basis — products and services from local cooperative enterprises in their surrounding neighborhoods.

This commitment by Cleveland’s anchor institutions has won national acclaim and created stable, living-wage jobs in green industries for residents of deeply poor communities.

In Boston, the Dudley Street Neighborhood Initiative has transformed one of the city’s most blighted neighborhoods into a vibrant, stable, and active community with permanent affordable housing and services. The Baltimore Housing Roundtable’s 20/20 Vision is already working with communities throughout the city to adapt Dudley Street’s community land trust model.

Our cities are facing a crisis. We can continue business as usual and allow development to drive out current residents and make our cities accessible only to the most affluent. Or we can chart a new path of inclusive development that creates vibrant and sustainable urban spaces.

Are you listening, Baltimore City Council?

The post Under Armour Wants to Use Baltimore Tax Revenue Without Giving Back to the City appeared first on Institute for Policy Studies.

Allie Busching is a New Economy Maryland Fellow with the Institute for Policy Studies.


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