Andres Oppenheimer notes Latin America’s sluggish philanthropic ratings in his January 12 commentary (Andres Oppenheimer: Latin America’s low philanthropy ratings). He also refers to a new law in India that will go into effect later this year, which calls for new corporations to immediately start lavishing at least 2 percent of their net profits on charitable causes. The article contrasts India’s new legislation with the current situation in Latin America, which is known to be one of the least generous charitable climates in the world.
The problem of a lack of philanthropic trust arises because of a lack of tax incentives levied against the country’s more affluent segment of the population, exasperated by the idea that the government should take care of those seized bypoverty. As a result, the question is whether or not Latin America would be wise to enact the same policy that New Delhi insists on carrying out in India.
The recently issued article stresses that Latin American governments do not want to waste funds on social welfare through tax deductions against the wealthy in order to secure sufficient funds for social welfare programs. One can agree with the aspect of the article that explains that the level of philanthropic donations should not be specifically mandated, but rather encouraged to a desirable level of action.
However, the brunt of the critique regarding Oppenheimer’s article goes back to his proposition that governments should specifically encourage well-managed organizations. Although your suggestion has merit, stemming back to how some charities are well managed or not can be ascertained as a result of tax policies a taxing practice that can prove to be revealing. While high levels of corruption remain persistent in many Latin American countries, it is hard to establish where a government should best spend its tax revenues. The region should begin to focus on finding a better way to determine an optimum profile of highly regarded charities versus those that are more likely to be second tier, and then proceed to encourage a steady flow of corporations that could provide a steady stream of charitable donations.
Sarah Miller, Research Associate at Council on Hemispheric Affairs
In response to Miami Herald: Andres Oppenheimer: Latin America’s low philanthropy ratings.
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