Boosting the Economy Through Charitable Tax Deduction Innovation

This is a guest post by Robert Egger, the founder of DC Central Kitchen.

By Robert Egger

On September 10th, the DC Central Kitchen, which I founded 22 years ago, received a huge honor; the First Family came to work side by side with staff to help prepare 4,000 meals for our shared community.

Truth be told, it was a great day. For staff, the majority of whom are former addicts or felons, being able to work closely and speak directly with the President was an honor few could have imagined a few years back, when they were scrounging for money to get high, or just trying their best to stay alive inside prison.

For other members of our team, being able to speak to the First Lady about our school food program, which provides locally sourced, cook from scratch meals for students at DC public schools was an unbelievable opportunity to offer practical, ground-level advice about turning school cafeterias into learning labs for math, science and nutrition.

But for me, it was a bittersweet visit. Why? Because it took place just two days after the President spoke to Congress and the country about the national imperative to create jobs, and in the last 5 months, the Kitchen’s social enterprise businesses have created 50 new jobs, with great starting pay and full benefits.

This visit offered the President a historic opportunity, at this critical economic juncture, to reframe the entire discussion about job creation and introduce the notion that there is actually profit in America’s economically essential, nonprofit sector. But instead, he spoke of service. A powerful, important and deeply American concept….but what a missed opportunity!!

The Kitchen is not unique. We are but one of thousands of social enterprises that are creating wealth while also decreasing demand for traditional charity via our empowerment programs. But, like all “charities” in America, we are viewed through the limited lens of being a “.org”… a “non” profit.

Imagine a new model.

Imagine the President standing before the press and suggesting that Congress explore a return on investment formula for programs like DC Central Kitchen, so that every donor could potentially see an annual and increasing tax deduction if the organization they contributed too could verify economic growth, new jobs or the decreased need for public spending. Imagine how that might spur innovation within the sector, while also generating ways in which people could attain wealth by investing in their communities. And not just wealthy philanthropists, but everyday people who have an equal interest in paying lower taxes, having a good paying job, living in a healthier communities and supporting businesses that, by their very nature, re-invest profit back in the community.

America is no longer a manufacturing economy, with jobs for all. Nor do we produce enough “extra” money to support an unlimited number of charities. Therefore, we must begin to let go of attitudes, ideas and tax policies that rely on the incomes and opportunities of a by-gone era.

For my money, the first thing to go should be the notion that job creation is limited to .com businesses while .org charities do good deeds and provide services.

There is a brave new economy coming, where philanthropy is more about how you make or where spend your money, not the check you write at the end of the year. It will be driven in part by American consumers who will demand both transparency and social impact for the businesses they choose to support.

But it will also rely a new generation of business people who seek satisfaction not through a trip to a “soup kitchen” to serve, but by going to work every day at a business that makes the community and the planet cleaner, safer and stronger. To get there, we need leaders who aren’t confined to antiquated notions of “dots” that divide resources or limit opportunity. The future has no dots; only bold new ways of making, earning and investing dollars in ways that strengthen our country – one community at a time.

And the first candidate that offers that kind of leadership will have my vote, and every vote I can muster.

One Comment

  1. Brett Ridge says:

    Robert,

    You’ve hit the nail on the head! There is a better way to view philanthropy than as simply a voluntary transfer of wealth. It should be seen as a vehicle of creation, inspiration and empowerment. By all means, we should be pushing for incentives for supporting charities that reduce burden on the government rather than expanding the role of government to take on more burden.

    Great stuff. Keep up the crusade!

    Brett