On Homelessness and Helping

Spring has come! ‘Tis the season of pink blossoms, green pastures, and showing off those white winter legs in a new pair of shorts. It’s the season of hiking, biking, and a growing disregard for dirt tracked into the living room.

It is also the season when we once again interact with certain neighbors in our community: homeless people who sleep under the city bridge and stand at the intersections.

These temperature temperatures have allowed me to transpose my runs back to the early morning, and it is there that I’ve encountered the familiar faces who rest on the park benches and wave to me as I huff past the library. And recently, I was overjoyed (though unsurprised) to find some great insights from Econtalk’s most recent episode, Erica Sandberg on Homelessness and Downtown Streets Team. It was the perfect confluence of these reminders that led me to reflect on the title’s question in a more practical way than ever before. I’ve concluded that there are three main things, actually constituting a hierarchy, that I want to remember when meeting and greeting homeless people in my neighborhood every day.

Good: It’s Yours (to Give Away)

The first time I encountered the below quote, I was struck by something that I had never before realized. In the recent past, I’ve tried to quell my desire to give money away, as I learned that my actions could incentivize begging or that the money would be spent on substances– both of which scenarios only exacerbate the person’s long-term sufferings. But is the chance of this enough to justify withholding assistance?

On the other hand, the economist in me notices that money can be used much more efficiently than in-kind donations of things like food and even gift cards. For example, cash can be applied to clothing and rent whereas fast food gift cards are obviously limited. Finally, there was one question that I couldn’t ignore: If I have extra change in my purse after all my needs (and even most wants) have been met, would it truly be better for me to hold onto it?

 “It will not bother me in the hour of death to reflect that I have been ‘had for a sucker’ by any number of impostors: but it would be a torment to know that one had refused even one person in need… Another thing that annoys me is when people say ‘Why did you give that man money? He’ll probably go and drink it.’ My reply is ‘But if I’d kept [it] I should probably have drunk it.’” — C.S. Lewis

There is a strange ring of justice here; one that utilitarian calculations cannot truly grasp. As the famous English jurist William Blackstone once wrote, “It is better than ten guilty persons escape than that one innocent person suffer.” So, if I do come to the point of question, may the benefit of the doubt be with homeless people and may I give that extra food or money which is mine– mine to give away.

And my genuine smile and wave too, yes, those are mine to give away as well.

Even Better: The Dignity of Work

But there is still something better; charity is only a temporary fix for a persisting problem. As Sandberg describes in the EconTalk above, restoring dignity through work is unquestionably the sustainable solution. The goal is not that homeless people will remain the object of our charity, but rather that we will come alongside them to help them walk the way out of homelessness. This is precisely where the principles of subsidiarity and solidarity go hand-in-hand. See Pope Pius XI in Quadragesimo Anno:

“Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them” (399)

The heart of solidarity is standing with one another through the trials and triumphs of life, essentially, recognizing our interdependence. The reason for both solidarity and subsidiarity are the same: human dignity. And part of human dignity is respecting the essential dignity of work. (For another great example in downtown LA, read Tattoos on the Heart.)

Best: You Need Them

Again, the dignity of work is wonderful, but there is still a prior wonder: the dignity of each human person. We need each other. We need our moms, our brothers, our friends, and we need the people in our city who are currently homeless. Each relationship is like an open door, allowing us to practice our human talents and to become even more ourselves than ever before. For a parting quote, I look to Pope Benedict:

“The world needs people who discover the good, who rejoice in it and thereby derive the impetus and courage to do good.

Joy, then, does not break with solidarity. When it is the right kind of joy, when it is not egotistic, when it comes from the perception of the good, then it wants to communicate itself, and it gets passed on…

In this sense we have a new need for that primordial trust which ultimately only faith can give. That the world is basically good, that God is there and is good. That it is good to live and to be a human being. This results, then, in the courage to rejoice, which in turn becomes commitment to making sure that other people, too, can rejoice and receive good news.”

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Giving From Your Heart (Using Your Head)

The ancient truism, “from those whom much is given, much is expected,” has been taken to heart by many an intelligent individual, but many fail to take advantage of the way that Uncle Sam actually supports this mission– primarily through tax deductions. Turns out, charitable giving can be a great way to make the world a better place while not breaking your bank. Here are just a few ways to maximize your tax benefits from charitable gifts:

  • Check that you’ve donated to an eligible organization. This is the first step when itemizing deductions. TaxACT suggests searching “the IRS’ database of Exempt Organization Select Check at irs.gov. Most religious organizations and government agencies are eligible, even if they’re not listed in the database.”
  • Donate household goods, real estate or stock. Recall that any personal property in good condition, such as clothing, furniture, or other household goods, may be donated and then written off for their fair market value. Even illiquid assets have a place in the world of giving, as you are able to receive an income tax deduction for the fair market value of the gift. Donating stock is a great way to avoid paying capital gains tax due on the appreciation, and you will be able to deduct the fair market value of the stock on the day of the gift.
  • Get a receipt for donations. For cash, this would mean keeping a bank record of the contribution with the name of the charity, date, and amount of the gift. Additionally, if the amount is upwards of $250 then you will need a written acknowledgement from the charity itself. You should follow the same logic for noncash donations, including a description of the items and an appraisal for collectibles.
  • Remember that you can be reimbursed for vehicle expenses. Therefore, consider logging miles when volunteering for a charitable organization. Investopedia notes that you are allowed to claim 14 cents per mile and additionally must obtain a written confirmation from the charity for the volunteer driving.
  • Keep track of your carryforwards. Since donations have ceilings in relation to deductions from your adjusted gross income (AGI) that usually hover at or below 50%, remember that the excess of that can be carried over to apply to next year’s income tax deduction. An article from Investopedia attests that you are able to “carry them forward for up to five years, after which time, they expire and you can no longer use them. If you have carryforwards, track them carefully so that you use them up before expiration, if possible.” For example, if your AGI this year was $50,000 and you gave away $30,000 in cash to a qualifying organization, $25,000 (50% of AGI) may be written off for this year and the extra $5,000 may be carried over into the next five years before it expires.
  • Even attending a fun charity event counts as a tax deduction, for the amount exceeding the fair market value of the event. Moreover, if this charity event happens to have an auction, you may calculate a tax deduction worth the amount above the fair market value for an item that you purchased from the auction. For example, if you won a vacation in the Dominican Republic valued at $7,000 and you paid $10,000, you could itemize a deduction of $3,000.
  • There are many easy tools out there to assist in keeping track of all your good deeds. The Forbes article “4 Steps to Maximize Your Charitable Giving Tax Break” specifically recommends the ItsDeductible App. Others include iDonatedIt and UDoGood.

Conclusion

Unfortunately, not every heartfelt act of charity is tax deductible. Keep in mind that donations to charities that operate under foreign laws or giving time or blood to a blood bank aren’t tax deductible. In conclusion, the best guidelines to follow when giving with your heart as well as your head are to keep track of every item, estimate the value as accurately as possible, and to never underestimate the exponential power of a good act, even in the eyes of Uncle Sam.