Unlike charity in the form of money and goods, the truly benevolent volunteer
efforts by Americans who donate their time is not acknowledged by the IRS. I'm
speaking of volunteers who receive no compensation whatsoever, as opposed to
paid volunteers such as those who serve in the military.
According to The Bureau of Labor Statistics, volunteering among Americans
has climbed each of the last two years after three successive years of decline.
This suggests that volunteering tends to follow patterns of economic hardship
and unemployment, as more citizens respond to the need to pitch in.
Roughly 63 million people volunteer for charitable causes in the U.S. each
year, at the rate of about an hour per week. Almost all of this donated sweat
- delivering meals to the poor, coaching youth sports teams, etc. - is targeted
at fundamental human needs, yet none of it is tax deductible.
Ironically, the IRS allows volunteers to deduct the cost of transportation
to their nonpaying jobs, but not the value of the work itself. How could this
value be computed?
Currently, the average hourly wage for all civilian American workers stands
at $22.75. A reasonable formula would take 25 percent of this figure, $5.69,
as the allowable per-hour tax deduction for documented volunteering.
Volunteer workers should be allowed to carry the credits forward for, say,
five years. This would allow unemployed volunteers to benefit in the future,
while inspiring them to make productive use of their available time in the present.
Yes, participating organizations would have to qualify as non-profits, just
as they must to receive tax-deductible cash donations. Yes, charities would have
to provide written records for workers, which is what they already do for monetary
donors. And, to be certain, there would be abuses. But whom should the IRS worry
about more: the billionaire who bends the rules when claiming a five-digit deduction,
or the Meals on Wheels driver who adds 15 minutes to his time sheet?
Granting a tax deduction for volunteer service would be a step toward correcting
serious inequities among paid and unpaid workers performing the same functions.
For example, many U.S. communities have the means to employ fulltime fire fighters,
while other locales rely on strictly volunteer forces. Why shouldn't the volunteers
be entitled to a tax deduction? Hospital workers, school employees and other
professionals often work side-by-side with unpaid volunteers who deserve a tax
break for their service.
Based on current levels of volunteerism, the cost of such a deduction would
be about $825 million per year if used completely by all who are eligible. More
likely, some volunteers would not take the deduction, while others would be motivated
to add volunteer hours, leaving the price tag under $1 billion annually.
At a time when tax-deductible monetary donations in the U.S. are falling -
last year by 3.8 percent to roughly $303 billion - and unemployment is rising
- currently at 9.8 percent, or about 15 million people - it's logical to inspire
and compensate volunteers for their service.
Presidents have long advocated volunteerism, from John Kennedy's "ask
not what your country can do for you," to George H. W. Bush's "a thousand
points of light," to George W. Bush's "new culture of responsibility." As
Barack Obama put it, "The need for action always exceeds the limits of government."
Most nonpaid servants give their time without any thought whatsoever of receiving
anything in return. And that's precisely why acknowledging them with a modest
tax reward makes perfect sense.
(c) Peter Funt. This column was originally distributed by the Cagle Syndicate.