As we celebrated Inde-pendence Day last week, it reminded me of the freedom we enjoy to give generously to the causes we care about.

John F. Kennedy said it this way, "The raising of extraordinarily large sums of money, given voluntarily and freely by millions of our fellow Americans, is a unique American tradition. ... Philanthropy, charity, giving voluntarily and freely — call it what you like, but it is truly a jewel of an American tradition."

At a meeting this week of the East Texas Chapter of the Association of Fundraising Professionals, Milton Key, with the Dallas fundraising consulting firm Alexander Haas, presented the newly released Giving USA annual report. The report indicates that Americans made charitable contributions of more than $358 billion in 2014. This represents a 7.1 percent increase in giving from 2013. Despite economic and geopolitical uncertainties here at home and around the globe, Americans remain enormously generous. In fact, the largest contributor to the increase in total charitable giving in 2014, according to the report, was an increase in giving by individuals.

In June, Hudson Institute's Center for Global Prosperity released the Index of Philanthropic Freedom, the first analysis of philanthropic freedom across the world. By examining barriers and incentives for individuals and organizations to donate money and time to social causes, CGP has measured, ranked and compared countries on their ease of giving. Hudson Institute is an independent research organization promoting new ideas for the advancement of global security, prosperity and freedom. For Hudson, this research project is a major step in identifying the public policy actions to encourage private giving, which in turn can increase generosity.

Following a heavy dose of fireworks and a Women's World Cup championship last week by the Americans, I was confident that a review of the index would confirm that America was at the pinnacle of the Index of Philanthropic Freedom. So was it? No. America ranked second in the world in philanthropic freedom, slightly behind The Netherlands. Though The Netherlands received a lower score than the U.S. regarding the tax favorability of donations, they edged out the U.S. with higher scores in their "ease of ability to create charities," and "ease of ability to send aid in the form of cash and in-kind gifts to other countries."

It has been widely publicized how the IRS made it difficult for some politically related charities to organize in recent years, but I have not known the process to keep any local groups from creating a charity when they felt one was needed. The process is time consuming, so I can see how the U.S. might get a demerit for difficulty. Here in America, getting aid to foreign countries also remains a difficult process. In the U.S., one of the main responsibilities for the IRS is to make sure that a public benefit results from charitable contributions. If a contribution results in a private benefit rather than a public benefit, the individual is not permitted to deduct the contribution from their taxes. The news is peppered with stories about organizations and individuals that have been caught trying to take advantage of the system. It is hard enough for the IRS to monitor this type of activity in the U.S.; think about how hard it would be to prove that a contribution is truly being put to public use in a country thousands of miles from the nearest IRS office. The process to make an equivalency determination, proving that a foreign organization is the "equivalent" of a U.S. charity, can be tedious and costly. Several organizations including the Council on Foundations and Independent Sector are working together to create a repository of information called NGOsource to speed the process and help reduce the cost to U.S. charities working abroad. Hopefully their efforts will cause the U.S. to improve our score in this area.

Through my work here at East Texas Communities Foundation, it is obvious that many East Texans have found a way to support international charities, despite the barriers that keep the U.S. from the top spot in the Philanthropic Freedom Index. Overall, only the United States and Canada received top scores in the area of tax favorability for charitable donations. Americans still place a high value on encouraging philanthropy. Let me encourage you to express your freedom to generously support the causes that matter the most to you as your next best opportunity to give well.


Guest columnist Kyle Penney is president of East Texas Communities Foundation. The mission of ETCF is to support philanthropy by providing simple ways for donors to achieve their long-term charitable goals. To learn more about ETCF or to discuss your charitable giving, contact Kyle at 866-533-3823 or email questions or comments to More information is available at

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