Don't punish the philanthropists

Baltimore social entrepreneur says reducing tax benefits of donations is wrong way to tackle national debt

October 11, 2011|By Sean Smeeton

As the president of a small business in Baltimore, I know a thing or two about the difficulty that entrepreneurs face when trying to get a loan from a bank in this struggling economy. I can also tell you from my personal experiences that — when others are unable or unwilling to help — independent, philanthropic investments can be a real lifeline to small businesses.

Now, however, the Obama administration wants Congress to reduce the charitable tax deduction as part of its deficit-reduction plan, making it harder for Americans to give back to their communities through philanthropy.

Philanthropy's independence allows people to use their private money to do public good, and threatening to reduce the charitable deduction jeopardizes philanthropy's ability to invest in Baltimore's greatest resource — its people. Foundations provided seed money to start our social enterprise, the Sylvan Beach Foundation, in 1994, whose initial purpose was to empower impoverished, young adults to take control of their lives by taking control of a business. Over the years, the young entrepreneurs operated and managed four social ventures — Sylvan Beach Lawn Care, Sylvan Beach Café, Sylvan Beach Ice Cream and Sylvan Beach Catering — all of which received philanthropic support from local foundations.

Their continued investment in organizations that serve Baltimore is a compelling example of why the president and Congress should reconsider their willingness to reduce our ability to give charitably.

Philanthropy made the dream of operating a business that serves more than the bottom line possible. In 1999, the first Taharka Brothers Ice Cream shop opened on West Preston Street in Baltimore with a belief that ice cream has the power to bring people together and maybe even transform a community. Besides creating a company with many stakeholders, Taharka's mission is to provide opportunities to young men in the neighborhood to develop their own business skills on the job and then be change-makers in their own community.

But dreams don't keep the lights on. In 2009, again, with the help of a $50,000 loan from a local community foundation, Taharka Brothers Ice Cream was able to build its own factory and expand its distribution to 30 retail stores and popular restaurants throughout Baltimore. Making the company a vehicle of social change would also not be possible without an innovative, philanthropic business model that helps our workers, our community and the environment.

If the White House stays its course on reducing our annual tax deduction for giving to charity, such innovations may not be possible; people won't give back to their community as generously as they once did; and it won't just be ice cream entrepreneurs like me who will suffer. Funding for all kinds of medical research is possible through philanthropy, as are unique educational programs for our public schools.

Let's tell the White House and Congress that we need to protect the many roles that philanthropy plays in our society — spurring business growth, retraining our workforce and educating our children — by preserving the charitable deduction at its current rate.

Sean Smeeton is the president of Baltimore-based Taharka Brothers Ice Cream Inc. His email is smeeton@sylvanbeachfoundation.org.

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