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XColumn: Our Tax Code Provides More Favorable Treatment to Private Jets than Private Philanthropy. Here’s How to Fix That
The COVID-19 pandemic has been devastating to families who have lost loved ones, and businesses that have lost everything. But it has also taken a significant toll on many nonprofits, charities and government agencies—and the people who rely on them.
About 22,000 nonprofits nationally are in danger of closing because of COVID-19, says a study by Candid, a nonprofit that provides data about the sector. And according to a Johns Hopkins University study, 1.6 million people working at nonprofits lost their jobs between March and May of this year. On top of all this, many organizations are expecting their signature fundraisers to raise only about half of what was projected.
Sadly, this impact to nonprofits comes as the need across the U.S. has grown to unprecedented levels. According to the Congressional Research Service, this past April, America broke a record that we all should pay attention to – every state and the District of Columbia reached unemployment rates greater than their highest unemployment rates during the Great Recession.
In my home of Los Angeles County, with over 760,000 people unemployed, 12% of nonprofits are expected to close by year-end, with the remaining seeing a 400% increase in need, according to a recent report by the County of L.A.'s Economic Resiliency Task Force for the Philanthropy/Nonprofit Sector. This holiday season, philanthropy is needed more than ever.
With so many people out of work and others on reduced incomes, especially in industries like hospitality and entertainment that make up such a large part of our economy in California, it is hard to ask people to dig deeper into an empty pocket. But there are some deep pockets that can be tapped — and we can do that by changing our tax laws to unlock vast sums of already tax-deducted money at a time it is needed most.
It is simple: Our tax structure needs to be reworked to better incentivize charitable giving, and just as important, push foundations and other donors to get money to work quickly for those it has been pledged to help. I have been advocating on this for years, meeting with legislators here in my Southern California home and on Capitol Hill.
That is why I have joined the Initiative to Accelerate Charitable Giving, a group announced on Giving Tuesday that is made up of a broad coalition of philanthropists from a wide range of backgrounds and industries, including John Arnold and Kat Taylor, as well as the Hewlett Foundation and Ford Foundation signing on to our goals. We have come together to push for changes in our tax laws to unlock philanthropic funds at a time of desperate need.
We cannot wait to fix our clogged philanthropic pipeline. It is an emergency. With the Biden administration coming in, this is a bold move that can pay immediate dividends if prioritized.
Currently, $1 trillion sits in private foundations and $120 billion more in donor-advised funds, charitable giving vehicles that provide donors with immediate tax deductions even before the funding is distributed to working charities. To put that into perspective, that is more than half the $2.2 trillion spent on the CARES Act, the largest government stimulus program in U.S. history. I know firsthand just how much good could be done if that funding was unleashed.
As co-founder of the Partnership for Los Angeles Schools, I have seen the value of philanthropy up close. The Partnership manages 19 of the highest-need public schools in Los Angeles, serving 14,200 students — working under and with full accountability to the Los Angeles Unified School District. Our efforts have more than doubled graduation rates in Partnership schools for an incremental $675 per student in additional funding, fully paid for by philanthropic dollars.
Nine out of every 10 people in the United States receive no tax benefit from their philanthropic giving. Americans routinely rank high on lists of charitable giving. We are generous people. Imagine how much more we could give if the government removed some obstacles.
Our tax code provides more favorable treatment to private jets than private philanthropy. It is past time to strengthen and expand the new non-itemizer deduction, providing a real tax incentive for almost all Americans to donate to charities, no matter the size of the donation.
And for the wealthiest among us, we also need policies with real teeth that ensure donor-advised funds fulfill their stated purpose. Today's laws simply do not do enough to push these funds to help people in need quickly, even though donors get full tax benefits up front. We ought to change the laws to revoke these generous tax advantages if the contributed funds are not distributed to charities by a certain time.
Foundations can also do more, getting funds in the hands of charities on the ground rather than keeping it locked up in ivory towers. Far too many foundations dole out the federally mandated minimum of 5% every year. That handcuffs them from making bold, sustainable and long-range commitments to solve today's real problems. It also makes it much more difficult to acquire and retain the expertise to adequately address them.
This fall, people across the country and here in Los Angeles turned out to vote in record numbers despite every conceivable obstacle in their path. They want to make the world a better place. The least we could do is fix our laws to help everyone do a little more good.
Melanie Lundquist is an activist philanthropist and co-founder of the Partnership for Los Angeles Schools. She is a member of the Initiative to Accelerate Charitable Giving and a signatory to the Giving Pledge.
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TikTok’s Latest Ad Strategy: Let Brands Crowdsource Creators
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
TikTok’s newest advertising program will allow brands to crowdsource content from creators.
Branded Mission, which the Culver City-based video-sharing app announced Wednesday, is currently being beta-tested. The program lets brands release briefs containing specific creative directions—such as incorporating a specific hashtag, visual effect or audio—with the goal of procuring videos that will become promoted ads. Creators with at least 1,000 followers will be compensated with cash payments if the content performs well.
Creators participating in the “authentic branded content” program, as TikTok described it, can choose which brand initiatives they wish to participate in—with each Branded Mission “page” highlighting details like how much money a creator could potentially receive for participating. TikTok told Business Insider that it’s testing various payment models, including a first-come, first-serve model as well as “boosted traffic” compensation.
“Creators are at the center of creativity, culture and entertainment on TikTok,” the social media firm said in a statement. “With Branded Mission, we're excited to bring even more creators into the branded content ecosystem and explore ways to reward emerging and established creators.”
TikTok’s previous advertising strategies have relied on creators with large followings, with the recently announced TikTok Pulse targeting users with at least 100,000 followers. Branded Mission, on the other hand, gives creators with smaller platforms a chance to make more revenue beyond programs like TikTok’s Creator Fund.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Greater Good Health Raises $10 Million To Fix America’s Doctor Shortage
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The pandemic highlighted what’s been a growing trend for years: Medical students are prioritizing high-paying specialty fields over primary care, leading to a shortage of primary care doctors who take care of a patient’s day-to-day health concerns. These physicians are a cornerstone of preventative health care, which when addressed can lower health care costs for patients, insurers and the government. But there’s a massive shortage of doctors all over the country, and the pipeline for primary care physicians is even weaker.
One local startup is offering a possible answer to this supply squeeze: nurse practitioners.
On Wednesday, Manhattan Beach-based Greater Good Health unveiled $10 million in new funding led by LRVHealth, adding to $3 million in seed funding raised by the startup last year. The company employs nurse practitioners and pairs them with doctor’s offices and medical clinics; this allows nurse practitioners to take on patients who would otherwise have to wait weeks, or even months, to see a doctor.
“This access and equity issue is just going to become more pervasive if we don't do things to help people gain more access,” Greater Good founder and CEO Sylvia Hastanan told dot.LA. “We need more providers to offer more patients appointments and access to their time to take care of their needs. And in order to do that, we really need to think about the workforce.”
There has been a growing movement in the medical industry to use nurse practitioners in place of increasingly scarce primary care physicians. California passed a law in 2020 that will widen the scope of nurse practitioners and allow them to operate without a supervising physician by 2023. Amid a shortage of doctors, there’s also the question of what will become of the largest and longest-living elderly population in recent history, Baby Boomers. Public health officials are already scrambling for ways to take care of this aging demographic’s myriad health needs while also addressing the general population.
“By the time you and I get old enough where we need primary care providers to help us with our ailments and chronic conditions, there aren't [going to be] enough of them,” Hastanan said. “And/or there just isn't going to be enough support for those nurse practitioners to really thrive in that way. And I worry about what our system will look like.”
Nurse practitioners function much like doctors do—they can monitor vitals, diagnose patients, and, in some cases, prescribe medication (though usually under the supervision of a doctor). Nurse practitioners need to get either a master’s degree or higher in nursing and complete thousands of hours of work in a clinical setting. All told, it usually takes six-to-eight years to become a nurse practitioner, compared to 10-to-15 years to become a practicing physician.
Greater Good Health’s platform puts nurse practitioners in often years-long care settings where they manage patients—most of whom are chronically ill, high-risk patients that need to be seen regularly and thoroughly. This allows them to follow up more carefully on patients they have managed for years, instead of catching up on a new patient’s history and treating them in the moment. Patients, meanwhile, don’t have to see a rotating door of clinicians and can talk to a provider they already have an established rapport with.
The one-year-old startup will use the funding to provide learning and development opportunities for its nurse practitioners and also connect them with each other through virtual support groups. Burnout has been an issue across health care during the pandemic, spurring an exodus of nursing and support staff and leaving health care facilities woefully understaffed. Greater Good hopes that keeping nurse practitioners in more stable, years-long care situations and offering them career development opportunities will help retain them and keep them in the workforce longer.
“We want them to be well-rounded and balanced both in work and life, and we see that returns us healthier, more engaged and ready nurse practitioners,” Hastanan said.
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
Plus Capital Partner Amanda Groves on Celebrity Equity Investments
On this episode of the L.A. Venture podcast, Amanda Groves talks about how PLUS Capital advises celebrity investors and why more high-profile individuals are choosing to invest instead of endorse.
As a partner at PLUS, Groves works with over 70 artists and athletes, helping to guide their investment strategies. PLUS advises their talent roster to combine their financial capital with their social capital and focus on five investment areas: the future of work, future of education, health and wellness, the conscious consumer and sustainability.
“The idea is if we can leverage these people who have incredible audiences—and influence over that audience—in the world of venture capital, you'd be able to help make those businesses move forward faster,” Groves said.
PLUS works to create celebrity partnerships by identifying each client’s passions and finding companies that align with them, Groves said. From there, the venture firm can reach out to prospective partners from its many contacts and can help evaluate businesses that approach its clients. Recently, PLUS paired actress Nina Dobrev with the candy company SmartSweets after she had told them about her love for its snacks.
Celebrity entrepreneurship has shifted quite a bit in recent years, Groves said. While celebrities are paid for endorsements, Groves said investing allows them to gain equity from the growth of companies that benefit from their work.
“Like in movies, for example, where they're earning a residual along the way, they thought, ‘You know, if we're going to partner with these brands and create a tremendous amount of enterprise value, we should be able to capture some of the upside that we're generating, too’,” she said.
Partnering in this way also allows her clients to work with a wider range of brands, including small brands that often can’t afford to spend millions on endorsements. Investing allows high-profile individuals to represent brands they care about, Groves said.
“The last piece of the puzzle was a drive towards authenticity,” Groves said. “A lot of these high-profile artists and athletes are not interested, once they've achieved some sort of level of success, in partnering with brands that they don't personally align with.”
Hear the full episode by clicking on the playhead above, and listen to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
dot.LA Editorial Intern Kristin Snyder contributed to this post.