#6/24 on state foundations, a +1% pledge and generous gestures

Dear Readers,

“I am relieved”, you rarely hear that at the moment. But that's how it is for me. Because our foundation startup bcause has received over four million euros for further growth from old and new investors. For me and the team, this means: enough time to further develop our digital revolution of giving. Enough time to grow our community of over two thousand users. Enough time to make online donating as commonplace as an online bank account.

My newsletter is rarely about bcause. Still, today I feel a need to say thank you to the many readers who support me in this mission.

Best regards, Felix

A number that stays in mind: 35 billion

This is how much wealth the largest donor in Germany has donated in recent years: The Federal Government. Added to this are hundreds of millions of euros in annual grants. The Foundation Report is a fascinating source. And from the response to a parliamentary inquiry, one can read that the federal and state governments hold stakes in over one hundred foundations.

This is a double-edged sword: on the one hand, foundations are ideal for shouldering perpetual tasks such as the follow-up costs of nuclear energy (the Fund for the Financing of Nuclear Waste Disposal KENFO). On the other hand, foundations are also a way to operate with little transparency outside of budgets.

I think it is time for us to activate more private wealth in particular to tackle the major collective tasks!

A person who inspires me: Tobias Thelen

The other day I had Tobias Thelen as a guest on the podcast “Das Neue Geben”. He is the managing director of a company in the medical sector - and one of hundreds of heirs in an old family business. He describes his personal money story, living under the radar, the annual family meetings, and how he deals with his life's Monopoly Chance card “You receive a dividend”.

I was particularly impressed by the simple formula with which Tobias lets his engagement grow: ten years ago, he decided to dedicate 1% more of his income and time to the common good each year, and he is now at around 20%. He uses this to support causes as diverse as the education of indigenous girls in Guatemala, the integration of refugees into the labor market, or sustainably managed forests.

By the way, my guest post in the Mannheimer Morgen on the question “How do we get the rich to give more, Mr. Oldenburg?” fits right in with this conversation.

An idea for further thought: Generous gestures

Another supplement to the last edition with Marlene Engelhorn. In the summer, the Süddeutsche Zeitung had quoted me not only with my admiration, but also with criticism of her “Guter Rat” project. Marlene invited me to contribute a commentary on this in a special issue Taxes and Philanthropy of Alliance magazine, which she guest-edited. A generous gesture, I think. The issue is behind a paywall, but I'm happy to share the article via email. Here is a brief insight:

• ”Taxing the rich feels good. It feels right. Especially with the prospect of additional billions to help the less fortunate. Fifteen years ago, I would have agreed. But my perspective has changed …”

• “Public money cannot do everything … private giving complements rather than substitutes for public funding. Governments, with their budgetary and political constraints, often struggle to fund emerging or niche causes … Philanthropy can take risks and innovate in ways that public funding, bound by majority coalitions, bureaucracy and short-term political cycles, simply cannot.”

• “… rejecting private philanthropy altogether on accountability grounds is too high a price to pay, given the poor alternatives.”

• ”Tax incentives for giving should not be seen as a substitute for fair taxation, but as a mechanism to encourage private contributions to the public good. If some of this ends up being somewhat idiosyncratic or even eccentric, that seems to me a reasonable price to pay - and no worse than government funding.”

• “Tax breaks do not create philanthropists. They do not make anyone richer, they simply amplify a gift.”

• “As we strive to create a fairer tax system, let us not create a society where people give only because they have to.”

What do you think? Are taxes better than private giving, or do we need both in an open society?