Icons, myths, and misleading statistics color perceptions and influence US government policy to the tune of billions.
Last month the Washington Post ran a thought-provoking analysis piece on the disparity between the common image of the family farm and the reality of large family farm businesses that pull down hundreds of thousands in Federal farm subsidies. It struck me that the farming industry showed some striking similarities to the charity industry in its reliance on myth and image to justify policies that yield billions in government support:
- As it turns out, the largest family farms (those with incomes over $500,000) are becoming the biggest beneficiaries of subsidies, even though they are a tiny fraction of the total number of farms. Similarly, the biggest beneficiaries of Federal charity tax exemption and tax-deductible donations are hospitals and universitites, not the homeless shelters and the Mother Teresa type groups that form the common image of charity organizations.
- The smaller family farms are extremely numerous; however, over half of the smaller acerages are really hobby farms that generate very little income. There is a similar thing going on with charities: many of the hundreds of thousands of small charities are personal projects of various sorts, which is possible because of the relative ease of establishing an incorporated charity and gaining IRS recognition. With both farms and charities, the huge numbers of small groups mask the concentration of income and activity in a relatively small group of very large players.
- The story quotes farmer John Phipps, "'Being labeled as a family farmer immediately qualifies me as someone who needs help,' he said. 'Name one other business like that -- there are none.'" Not exactly, John: starting yourself a charity has exactly the same effect.
- The article notes that the existence of Federal farm subsidies has led to an increase in the price of land, paradoxically making it harder for smaller family farms to grow. There could be an analogy here in fundraising (may be worth researching): the result of charitable tax deductions could be to increase the funding and sophistication of fundraising operations in large charities (and even lead to the creation of charitable donor-advised funds by mutual fund companies), while small organizations still rely on special events, sales, and raffles that are practically unaffected by tax deductions.
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