Americans are, beyond question, the most charitable people in the world. In this holiday season of giving, Gazette Editorial Page Editor Wayne Laugesen spoke with Elise Westhoff — president, CEO, and board member of the Philanthropy Roundtable — to discuss threats to the state of American charity and threats to the tradition.

Laugesen: Tell us about some of the challenges to philanthropy right now. I would think that philanthropy would be untouchable, something that everybody respects and admires and wants more of. What’s going on?

Westhoff: Philanthropy is a very important part of American culture and life, and I think we all saw in the last year as a country, as a world, we face unprecedented challenges. And honestly, philanthropy was a silver lining throughout all of that. Despite the fact that there was a global pandemic, economic hardship, economic uncertainty, people stepped up in extraordinary ways in 2020. It was a record-breaking year. So we had $471 billion dollars in charitable giving, which is a 5% increase over the previous year.

Laugesen: It’s an all-time record, even when adjusted for inflation. Right?

Westhoff: Yes. It was truly an extraordinary year and people were creative and innovative about ways of getting money quickly to communities that needed them. So they used different vehicles like donor-advised funds, community foundations in order to be really nimble and quick and flexible while the government was being mired in bureaucracy as always and not fast to help those in need. So to your point, it’s surprising that we see threats to philanthropy, but a lot of the criticism of philanthropy is coming from a similar place to what we’re seeing in our broader culture. Criticism of capitalism and the free market system and wealth, in general, is now being assigned also to philanthropy.

Laugesen: Describe the threats.

Westhoff: So there are efforts to force donors to give more quickly or to be more transparent about their giving. There are efforts to out and shame donors for not giving to the cause de jour and efforts impose ideas that there is a right way to give and a right community to give to. And then there are communities that you shouldn’t invest in and give to. It is the picking of winners and losers. We see this both in the private sector speaking about these things and trying to push them on people. We also see it in legislation that’s being pushed at the federal level and the state level to impose certain mandates and restrictions on philanthropists and charities.

Laugesen: What drives that? You gave a speech recently in Colorado Springs and spoke of left-wing activism as a threat to philanthropy. What motivates that? Why does the left feel threatened by philanthropy?

Westhoff: Well, again, there is this growing criticism of the free market system of capitalism, which is unfortunately now a bad word. They talk about this being a system of victims and oppressors and you are either one or the other. People that have power are oppressors and people that don’t have power are the victims. It’s a very binary way of seeing the world. This is playing out in K-12 education where we have things like critical race theory being pushed. And so it’s that similar sentiment that is coming at the philanthropic sector. But, what I’ve said and what you heard me say over the summer and over one of my talks and many of my talks is that philanthropy is actually fueling some of these ideas, getting into the corporate world with things like ESG (Environmental, Social, and Governance), Critical Race theory in schools. All of the acronyms that we all know today, because, with far-left institutions, those ideas are being written about researched and fueled, and sent out into the broader public realm.

Laugesen: Money is power in the United States. So if you have a lot of money and you have a foundation and you give that money away, isn’t that the oppressor trying to even things out between the so-called oppressor and the oppressed? Why wouldn’t people concerned with equity see philanthropy as a means of moving toward it?

Westhoff: We believe that philanthropy, when done correctly, is exactly that. It is a means of getting resources to people in need. The people who philanthropists who are generous and give are people who have already done a lot for society. In many cases, they’ve built businesses that have provided jobs for people and provided valuable services for humanity. In addition to that, they’ve decided to contribute in other ways to people in need. So yes, philanthropy is positive and good in society when done right. Obviously, there are people who use their philanthropy to push ideas we don’t think are good for society, such as “defund the police” and programs that frame the “victim and oppressor” system. But for the most part, the vast majority of philanthropy is neighbors helping neighbors and it should be celebrated instead of attacked.

Laugesen: Giving has become dangerous in some ways. We frequently see someone give graciously to an organization for one reason or another. Then somebody digs up dirt on that organization or finds out that that recipient believes in something the left does not like, such as traditional marriage. Is that is that discouraging philanthropy?

Westhoff: That is why we believe donor privacy is essential to the philanthropic tradition. Unfortunately, in the world we live in today, people have legitimate concerns about giving to the causes that they believe in, whether it’s for religious reasons, humility, fear of being outed and shamed, and potentially canceled for all sorts of fears including their physical safety. There are all kinds of reasons why people would choose to give privately anonymously, and there was a landmark Supreme Court case last year (Americans for Prosperity Foundation v. Bonta) that went in our favor. The court ruled that we have the constitutional right to donor privacy.

This particular case involves threats to the physical safety of donors. Unfortunately, we have to be concerned about that in this day and age, and that’s why it’s so important to protect the right to privacy in giving.

Laugesen: You have an interesting story about what led you to this field. Could you briefly tell us just a little about that?

Westhoff: I grew up in Indiana with some challenges. I had a father who had severe mental illness and became abusive. I wasn’t able to see him after a very young age. My mother sat us down after he had been arrested and said, “you know, in life, you’re just not always dealt the best hand, but you have to do the best you can with what you have.” She instilled the importance of education and faith and hard work and personal responsibility. That was reinforced when my stepdad came into my life. He had grown up in rural Indiana, had grown up in poverty, had his father was in jail and his mom deserted him when he was 15. He was a person who was able to overcome a lot of challenges in his life with those same principles of focusing on education and faith. He had one person in his community that really believed in him and was able to mentor him along. And so going through those experiences when I was young really kind of fueled my passion for wanting to help other people overcome challenges because you realize that when you have those values at the center, you really can overcome so many things. And this is a country that allows that. And so, what gets me up every morning is wanting to help inspire other people.

Laugesen: Should poor people give charitably, or is this just something for the upper-middle class and the rich? Or is it good for a poor person to give? If so, why?

Westhoff: I think being charitable is a wonderful thing for anyone. And you know, it may not be a gift of a million dollars. It may just be doing something kind for your neighbor, making them a meal, checking in on them, giving them a phone call if they seem down. We all have the opportunity to have a positive impact on someone else’s life, even if we don’t have money. I can give something. I can give my time, I can give my talent. I can give just kind words. That contributes a lot to a healthy civil society.

Laugesen: There is legislation in the works to make it harder to be charitable. I’m thinking in terms of the King-Grassley bill in the Senate. Can you tell us a little bit about that and what the ramifications are should it become law?

Westhoff: The King-Grassley bill is really a solution in search of a problem. America is the most generous country in the world and Americans are more generous than we ever have been in history. So, to have legislation that targets or stymies giving at a time like thiis doesn’t make sense.

Laugesen: What does the bill do?

Westhoff: This bill would target donor-advised funds, which are really flexible tools for donors. Think of them as charitable accounts where people can put money in and spend it over a period of time or right away. They have the option and flexibility to do as they please. Some people choose to invest in their communities through a donor-advised fund long-term. This bill would put a time limit on each dollar that goes in and out. It has to be spent within a 15-year time frame, or there’s a 50% tax on that money and it would just discourage giving. It would limit the amount of money that goes to people in need. It discourages family members from getting involved in their own foundations by saying that work done by a family member is valued differently than work done by a non-family member. So going back to those attacks on the larger cultural issues that we’re seeing, this is really an attack on intergenerational wealth that says we don’t want family members to have involvement in their own family foundations. And if they do, they shouldn’t be compensated for their work just because of their last name, which we think is just a wrong way to do this.

Laugesen: They certainly must have some justification for running this, right?

Westhoff: The bill was initiated by Ray Madoff, who is a liberal Boston College law professor — a long-time critic of donor-advised funds and intergenerational wealth — and billionaire John Arnold. They want to accelerate the amount of money going into communities. But we view this as imposing their view of charity on everyone else. And unfortunately, I think one of the things that made philanthropy so successful is its voluntary nature. It has never been a coerced activity and to start mandating and coercing people runs the risk that they’re going to be less generous. The more it’s ignited from their own passion, people will be more generous. So leaving that flexibility, we think, will encourage more giving. This bill overlooks the value of investing in a community for the long term. There are a lot of people who give over decades to their community, and they like to do that on a steady basis. Why would we criticize that? It is a wonderful thing. And if they want to give it all away in one year, they should be able to do that, too. But let people decide on their own. The government shouldn’t be telling us how to be charitable.

Laugesen: In addition to that bill, there are efforts to create more disclosure regulations as to who gives to certain charities and where the money goes. What’s going on?

Westhoff: So we see efforts for donor transparency happening at the state level. Several states have pushed forward disclosure requirements in the past few years and also at the federal level. So at the roundtable, we’re actively working to counter those efforts through education and ensuring that people understand the various reasons why one would want to give privately. We’ve really been working to educate people on those legitimate reasons for anonymous and private giving and obviously reinforced by the recent Supreme Court ruling.

Laugesen: What is the Patriotic Millionaires Initiative to accelerate charitable giving?

Westhoff: So the Patriotic Millionaires have called for doubling payout rate from private foundations. So currently, private foundations have a 5% payout rate per year. That number came from a number of calculations, but ultimately it allows for private foundations to exist in perpetuity.

Laugesen: The payout rate needs to allow these funds to grow, just as a hedge against inflation if nothing else.

Westhoff: Yes. The roundtable has helped encourage best practices like sun-setting a foundation. Having a time limit, we think that is a best practice a lot of people have adopted it. But we also don’t believe that foundations should be forced to spend down over a certain period. Again, it’s about the role of government in the charitable sector. We don’t believe that payout over a certain time frame should be mandated by the government. It should be a choice.

Laugesen: Please tell us about the True Diversity Campaign?

Westhoff: We believe that diversity is one of America’s strengths, and it should be celebrated. But unfortunately, what we see today is a push by far-left activists of putting everyone into a certain box based on their race, their gender, their sexual orientation and viewing people simply by those immutable characteristics rather than judging them on the content of their character. They’re not getting to know them and value them as individuals. And so our concept of true diversity is to say, let’s celebrate diversity, but let’s celebrate the right kind of diversity. That means getting to know individuals and valuing who they are. What types of diversity could help you best fulfill your mission and be excellent at what you do? So that could mean diversity of skill sets and backgrounds and experiences. There are lots of different ways to view diversity that you could bring in without doing it in a way that simply turns into box-checking. We are looking to share that message more broadly in the coming year and hope that organizations and companies will think about a different way to bring in diversity without creating so much division.

Laugesen: You’re talking about true diversity versus pure genetic diversity.

Westhoff: Exactly. Diversity is deeper than just your immutable characteristics,

Laugesen: What would you tell someone who says we need to cut back on charity because then we could tax people who have a lot, we can tax them more and the government could dole out this money. The government, not charities.

Westhoff: A strong civil society is our ability to be flexible and nimble. Look to local solutions to solve problems. I think we’ve seen over the last year again that the government hasn’t been so effective in solving big problems, but communities and philanthropy and a strong civil society. Churches, you know, neighbors, they’ve been the ones that have been able to be quick and nimble in solving problems. To put more money into the government’s hands to manage is not an effective way to solve some of our most pressing challenges as a country.

Laugesen: You mentioned religion, which is a major foundation of charitable giving, whether it be Catholic Charities, Lutheran charities, Jewish charities, etc. When I express that to friends and colleagues who are secular or atheist, they often say yes the meal that you get at the sectarian soup kitchen is dependent on you claiming allegiance to a God maybe you don’t believe in. Is there any truth to that? 

Westhoff: That’s not been my experience with faith-based givers. I think to most churches and synagogues and mosques and whatever faith tradition, being charitable and helping their neighbors is philosophically important and foundational to their beliefs. That doesn’t mean they’re imposing their beliefs on others. We would not be well served to devalue the religious institutions in our country and the value they provide to people in need. They’ve been immeasurably helpful to those who struggle.

Laugesen: I appreciate having the opportunity to talk with you. Happy holidays, and thanks for what you do.