A win-win approach to solving public problems

Minnesotans can be astoundingly generous. We contribute mightily to nonprofits of all stripes. We respond with dollars, goods, time, labor and emotion to natural disasters around the globe.

At the same time, many don't enjoy paying taxes or swallowing tax increases. They like to think they, not the government, can best decide what to do with their earnings, dividends and inheritances.

Suppose, then, we found a way to generate substantial funds for nonprofit organizations that have shown they can help solve some of our biggest state and national problems. Suppose, too, this fund-raising method did not raise taxes but reduced them.

And suppose this method embodied key principles of the major political parties---including the Tea Party.

Here's the idea:

Recruit a credible, trusted panel of experts to research and compile a list of nonprofits with proven records of tackling parts of our stickiest challenges, whether in job creation, health-care costs, education, criminal justice ... the list is long.

Then permit donors to those organizations to deduct on their income-tax returns substantially more of their contributions than is now allowed.

People contribute for many reasons -- to support a strongly held belief, to honor the memory of a loved one, to enjoy the thanks of the recipients and the good feelings that come with sharing one's good fortune. Perhaps they simply want to get a solicitor out of their face. But one of the most important motivations is deductibility.

Under this tweaked method, eligible contributions would remain voluntary, just as they are under current tax law. But the incentive of a bonus deduction would benefit organizations with a track record of commitment, effectiveness and integrity. No fly-by-nights allowed.

As a safeguard, organizations receiving the additional funds would agree to pay the cost of an outside auditor who reports to the expert panel.

Because the donations would flow directly to the targeted organizations, they would not require new government programs or bloat existing ones.

[The increased deduction would lower contributors' immediate taxes and the government's expected revenues -- not an advantage for cutting current budget shortfalls. But longer term, if the recipient organizations apply their successful methods more broadly, their success could trim the need for tax help in those targeted areas and that could help shrink the deficit.]

The panel of experts would be chosen by elected officials to reflect a broad spectrum of political and philosophical beliefs. A strong majority would be required to add a designated organization to the premium deduction list. And the list could be changed from year to year, allowing for innovation as well as failure.

The independent auditors would help the panel determine whether the organizations were handling the contributions effectively and honestly. If they failed to do so, the panel could drop them from the list.

Liberals might be willing to support a method that raises more money for a range of worthy causes. They also might favor an incentive that would be used primarily by higher-income taxpayers who itemize their deductions.

Conservatives might like the strictly voluntary nature of this tool and the prospect of reduced government spending, as well as short-term lower taxes.

Skeptics might question the method for choosing panel members, the prospect of political horse-trading and pressure from high-powered backers of favored nonprofits. Such possibilities could be minimized by making the panel's proceedings transparent, and appointing members with integrity and good judgment. It's been done before.

Most important, though, is the core idea: It is an incentive, not a mandate. No one need follow the panel's recommendations. Any contributions would remain voluntary. Donors would not have to give up their current charitable preferences. But over time and with appropriate scrutiny, the reputation of this method could grow -- and so, presumably, would contributions.

Would anybody bite? Or are we so conditioned to battling each other, so cynical and suspicious, so afraid of yielding political advantage, that any such approach would fall flat?

No doubt some would try to game the system. No doubt examples of incompetence or fraud would surface. We have not found a way to guarantee honorable behavior.

But focusing our most generous instincts and protecting the intent of that generosity might yield more effective ways to help address our most pressing problems. And everyone could claim a bit of the credit.

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Dan Wascoe, Golden Valley, is a retired reporter and columnist for the Star Tribune.

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