Volunteers Need a Break


Buried in the Bush Administration’s scrapheap of botched ideas is a Camelot-like plan to have all Americans contribute at least 4,000 hours of volunteer service during their lifetimes. Seeking to kindle some of JFK’s “Ask not what your country can do for you…” President Bush unveiled the concept in his 2002 State of the Union message, calling for “a new culture of responsibility.”

Five years later, the Bush program is a failure. The Bureau of Labor Statistics reports that volunteering among Americans actually dropped by 7 percent last year to the lowest point, as a percentage of population, since Mr. Bush’s call to action. But that’s not to say the spirit of volunteerism isn’t alive in America. Part of the problem is that unlike charity in the form of money and goods, the truly benevolent volunteer effort by Americans is not acknowledged by the IRS. In fairness, and to successfully promote more volunteer service, the tax code should be changed to correct this inequity.

Tax-deductible donations in the U.S. this year are expected to exceed $200 billion, a record sum. But a vast proportion of that total comes from corporations and the wealthiest individuals. Significantly, only about 10 percent of the money goes to charities that address basic human requirements – that is, helping the sick, the hungry, the poor.

Meanwhile, roughly 61 million Americans donate their time to charity each year, at the rate of about an hour per week. Almost all of this donated sweat – delivering meals to the poor, building homes for hurricane victims, coaching youth sports teams – is targeted at fundamental human needs, yet none of it is tax deductible.

Ironically, the IRS allows taxpayers to deduct the cost of transportation to their volunteer 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 $17.75. This figure could reasonably be used as the standard deduction for documented volunteering. 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, at the very least, deserve a tax break for their service.

The Bureau of Labor Statistics paints an interesting picture of America’s volunteers. People aged 35 to 54 tend to volunteer most, while adults in their early twenties volunteer least. Married people volunteer more often than single people; women donate more time than do men.

Notably, employed and unemployed Americans volunteer at almost the same rate – 28.7 percent versus 23.8 percent. That’s why an IRS deduction for volunteer service should be allowed to carry forward for, say, five years. This would allow unemployed volunteers to benefit from their service while inspiring them to make productive use of their available time.

Among President Bush’s lofty goals in 2002 was to “double the size of the Peace Corps” within five years. In fact, the size of the organization has remained stagnant since the president’s speech, and today stands at about 7,750 volunteers.

President Bush was quite right to point out that America needs more volunteers. But he was wrong to overlook any reasonable incentive, such as an IRS credit.

Back in 2002, when making the call for 4,000 hours of service by each American, the White House designed four lapel pins – bronze, silver, gold and “lifetime” – to honor the generosity of America’s volunteers. Incredibly, any citizen working enough volunteer hours to qualify must pay the government $2 to obtain a pin.

And, unless the IRS rethinks volunteerism, the two bucks isn’t even tax deductible.

© Peter Funt.

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