NOBLE NOBEL GIVING

As is customary, President Obama donated his $1.4 million in Nobel Peace Prize money to qualified not-for-profit organizations. He split it among 10 charities, supporting veterans and higher education, as well as Haiti relief and global outreach programs. Two of the organizations had previously received contributions from the Obamas: The United Negro College Fund and the Clinton-Bush Haiti Fund. This is a fine example of private funding for the public good.

AccountingWeb.com reminds us that former Pres. Jimmy Carter and Vice President Al Gore “took advantage of a subsection of the Tax Code that allows prize winners, under certain circumstances, to funnel the money directly to their chosen charities, rather than receiving the money into their own taxable incomes.” Carter gave his prize money to the Carter Center and the Rosalyn Carter Institute for Caregiving; Gore donated all of his to the Alliance for Climate Change. Dr. Martin Luther King Jr. donated his prize to the civil rights movement. By directing donations directly to the organizations, the money did not become taxable income. (They also forfeited any charitable deduction.)

The “Yes We Can” message, development version: President Obama’s philanthropic support could have served an additional purpose. In the press coverage of the President’s charitable gifts there was no mention of the decisive factors he used to select the organizations. Doing so might have influenced how other Americans make charitable choices. And, it would have “stimulated” the call for charitable foundations to specify the logic behind the grants they make. The charitable funding ecosystem would have been enriched with this information.