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The International Journal
of Not-for-Profit Law

Volume 3, Issue 2, December 2000

A publication of the International Center for Not-for-Profit Law

Table of Contents

Letter from the Editor


Church and State Relationships in German "Public Benefit" Law
By Dr. Christine R. Barker

Evaluating Tax Incentives for Donations to Public Benefit Organizations
By Paul Bater

Freedom of Association: Recent Developments Regarding the "Neglected Right"
By Leon E. Irish and Karla Simon

The Government of Israel's Control of NGOs: Legal Dilemmas and Structural Constraints
By Nitza Nachmias and Amiram Bogot


Introduction to the Non-Profit Sector in the Balkans
By Jenny Hyatt
Reviewed by Douglas Rutzen

The Third Force
By Ann M. Florini
Reviewed by Karla Simon

Weak Democracy and Civil Society
By Imco Brouwer
Reviewed by Sam Charron

Case Notes

Central and Eastern Europe:

Latin America and the Caribbean:

Middle East and North Africa:
Egypt | Tunisia

North America:
the United States

Newly Independent States:
| Russia

Country Reports

Asia Pacific:
| Australia | the Philippines

Central and Eastern Europe:

Latin America and the Caribbean:
Regional | Dominican Republic | Guatemala | Peru

Middle East and North Africa:
Bahrain | Israel | Palestine | Yemen

Newly Independent States:
Kazakhstan | Ukraine

North America:
the United States

South Asia:
India | Pakistan

Sub-Saharan Africa:
Ghana | South Africa

Western Europe:
Belgium | France | Germany | Ireland

International Grantmaking

Conducting Overseas Site Visits
By Victoria B. Bjorklund and Jennifer I. Goldberg  

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Editorial Board

Country Reports: North America

the United States

I) New NY Law: Unnecessarily Burdensome or Good Public Policy?

By Alexus Sham, ICNL Legal Intern

After the Council on Foundations successfully lobbied for the repeal of the federal notice-of-publication law, the state of New York implemented the legislation bill S. 07256 which reinstates the requirement that a foundation publish legal notice of the availability of their tax return for general public inspection. The law requires thousands of private foundations formed under New York law to buy legal notices next year. The notice must say the foundation’s annual return is available for public inspection. In addition, the notice must be in a paper of general circulation chosen by the clerk of the county where the foundation is headquartered. The law was signed into force by Governor George Pataki on August 16, 2000. Proponents of the new law argue that this notice hold foundation accountable for their actions. On the other hand, foundations argue that notice to the public is unnecessary because under current federal law, the public may inspect the returns upon request.

II) New Tax Witholding Requirements For Foreign Grants

John Edie and Jane Nober of the Council on Foundations explain new tax witholding regulations that may apply to grants to foreign entities or non-US individuals, where the grants cover travel to or activities in the United States. Click here for more information.

III) Council of Economic Advisers Issues Report-
“Philanthropy in the American Economy”

By Benjamin Plummer, ICNL Legal Intern

As a follow-up to the White House Conference on Philanthropy which occurred October 22, 1999, the Council of Economic Advisers has issued a report titled “Philanthropy in the American Economy” on November 25, 2000. The report addresses topics such as recent trends in giving and the future of philanthropy.

Using a variety of statistics and charts, the report reaffirms some long-existing trends and clearly illustrates others. The report begins by stating the trends which now exist in giving. Among them are an increase in giving both in real terms and as a percentage of GDP which has occurred consistently since 1995, and a breakdown of sources of giving showing that though individuals remain by far the largest single category of givers, the increase in giving has been proportionally greater for foundations than for individuals.

The report follows with the characteristics of individual givers as relates to wealth, age, education, gender, and race and ethnicity, as well as a section on bequests. This section finds that the more wealthy tend to give the most as a percentage of the total giving and as a share of their income, but, as a share of their net worth, the affluent give less than their poorer counterparts. (The notable exception is the lowest quintile of givers who give much more of a percentage of both their wealth and their net income than do all others.) This subsection also provides greater detail on the following general statements: older families tend to give more often then younger families and, when they give, tend to give more; more educated individuals tend to give more often than less educated; single women and married couples tend to give in greatest percentage to their population, with single men giving significantly less; African Americans give more in proportion to their wealth than whites, but less than whites when wealth is removed as a controlling factor; and that bequests transfer a large amount of money from the affluent to charities. It is also noted that the proposed elimination of the estate tax would presumably create a tremendous loss of income for charitable organizations.

Next, the topic of who receives the contributions is addressed, noting both consistencies with the previous decade as well as new trends. On the consistency side, religion remains the single largest beneficiary. A new development is that gifts to foundations have increased in proportion to totals received, and gifts to organizations working in the human services and religious sectors have declined. This section also examines the two facts that giving is more centered on religion in the lower earning tiers and more centered on universities in the higher tiers, and that men tend to give more to foundations while women give more to educational, medical, and scientific organizations.

The report next examines the possible reasons for giving, and states that though “help those with less” and “giving back to society” are listed as the two strongest reasons for giving by those surveyed, the results obtained may be less than accurate because tax advantage would probably be seen as a less socially condonable reason for giving and thus receive lower priority in a survey. (It is interesting to note that even with this supposed bias towards more altruistic motives for giving, “keeping taxes and other costs down” is still listed as a major motivation by fully one-third of those who give.) The report also notes that being asked to give, economic factors and tax incentives are all things which may have an effect on philanthropy.

In the last two sections, the report uses the extensive statistical data stated earlier to forecast trends of future giving and strategies to encourage greater contributions in the future. In the first section, the report optimistically states that as the population grows older, the statistical odds favor a greater degree of philanthropy. It then states that the mentality of givers has changed and as a result a new trend has developed called “venture philanthropy” where individuals in the private sector use for-profit techniques to manage the money they give. Finally, the trend toward “e-philanthropy” is discussed and how its probable users represent a relatively untapped demographic of giving.

Building upon the trends established, the report recommends the following to promote future giving. First, encourage youth to participate and understand how giving works to establish a future giving base. Second, adopt tax changes that promote further philanthropy such as allowing deductions for individuals who chose not to itemize, increasing the amount of income which can be deducted by both individuals and corporations, and simplifying the tax code vis-à-vis giving to make the process of taking advantage of  tax incentives less arduous.


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ISSN: 1556-5157