Events over the past year have created an incredible confluence of factors that indicate that this might be the most opportune time for philanthropy in our lifetimes.
Let’s review some of the national indicators that would imply these conditions. In 2017, sweeping tax law changes put more money in people’s pockets, across the income spectrum. Lower tax rates, admittedly at the expense of weakening the appeal of deductible charitable gifts, spurred the economy. Interest rates were reduced, further stimulating growth and jobs, and the economy was roaring prior to the global pandemic. With low interest rates, investors flocked to higher return (and risk) investments in the equity markets, and last week we saw a record for the Dow and S&P 500. Market investors have more appreciated assets than ever before, a great tool for charitable giving.
When the global pandemic hit, many thought there would be a decline in the housing market, but if you’ve seen the limited supply on the MLS lately, you’ll know that with high demand for Florida real estate this has driven prices significantly higher. People fleeing colder (and more restrictive) northern cities are increasing our population, and therefore demand on services (education, roads, healthcare, and housing) is growing rapidly. Many people, sitting on multiple properties across numerous states, are “house rich” and have the potential for extracting significant capital gains.
At the same time, needs across our community continue to grow rapidly as well. Those without assets are struggling as the pandemic has disproportionately affected lower income families, especially those in the service industries. Parents are choosing between working and keeping their children safe, and some don’t have any choice whatsoever. These financial pressures are forcing families into new challenges – hunger, homelessness, domestic violence, absence of healthcare, remote education, and needs for mental health services. Often economic challenges lead to broader societal ills, like theft, burglary, abandonment, assault, and more petty crime.
Charitable organizations are today’s Robin Hood — they effectively redistribute wealth from those with resources to those with needs — without governmental taxation. They facilitate the inherent desire of those who want to help with those who need help. Philanthropy tackles the challenges and solves problems in a more efficient way. Charity can quickly get the help where it’s needed most.
Today, many people are enjoying the benefits of asset appreciation, and yet our charitable giving community has been effectively shut down due to COVID-19. Gone are the golf and fishing tournaments, galas, 5K runs, and the like, replaced by virtual events and social distancing. Charities are struggling with cash flow, trying their best to keep up with the higher demands at the other end of the income divide. Wealth grows, yet needs are outpacing the support.
Southwest Florida is inherently government-light and anti-tax, yet maintains an extremely big heart for those less fortunate. Our charitable community is and will be a great vehicle for modern day Robin Hoods, facilitating wealth redistribution without government intervention.
Your philanthropy is needed now, more than ever. Please think about those who are in such desperate need today, and make a gift to your favorite non-profit. Let our history, and your legacy, remember this time when generosity changed the world.
Chris Simoneau is the Chief Foundation and Development Officer for Lee Health.