Don’t misinterpret the British reimbursement rate.British charities think it is too low.They have protested the 40 pence per mile (for the first 10,000 miles) rate as inadequate, established in 2002 before the latest round of the gas—or petrol—crisis.
In the U.S., the National Council of Nonprofit Associations has mounted a vigorous effort to rally nonprofits to support the Giving Incentives to Volunteers Everywhere (GIVE) Act, S.3429, cosponsored by Senators Chuck Schumer (D-NY) and John Ensign (R-NV).The legislation would establish the charitable reimbursement rate at 70 percent of the standard business mileage rate (currently 58.5 cents), so that whenever the IRS boosts the business deduction, the charitable mileage deduction would go up too.As of today, if enacted, the charitable mileage rate under GIVE would jump to roughly 41 cents.
Given that this is an election year, members of Congress will soon ditch Washington for the campaign hustings, leaving precious little time to enact this bill.It’s not too late for Congress to act.
NCNA and its allies have trotted out several compelling arguments for the GIVE Act, notably comparing the price of a gallon of gas in 1997 ($1.25), when the charitable mileage deduction was raised to 14 cents, to the price of a gallon today, well over $4.00 for most of the summer, still high at $3.74 on average according to the Department of Energy for the week of August 18th.Critics might say that the price of gas (petrol) in the UK is higher (112 pence, convertible to $7.87 a gallon, 110 percent above the U.S. price), but the UK charitable deduction for volunteers driving their own cars is 428 percent higher than what the U.S. allows.
But we shouldn’t have needed a gas crisis to galvanize attention to the issue of charitable deductions and reimbursements for volunteers’ driving mileage. What’s wrong with us that our nation has for so many years “stuck it” it to the volunteers who drive their own cars to serve the nation’s neediest people—often elderly and disabled—sometimes in far-flung, hard to reach communities where on-site services just don’t exist?
How should we interpret the persistence of a two-tiered mileage deduction calculation which as of July, 2008, compensated business-related driving at a level five times that of volunteers who drive their own cars for charities?It is a two-tiered system that treats community service charities and their dedicated volunteers as nothing less than second class.Contrast that with the United Kingdom, where the charitable mileage reimbursement rate is identical to the rate allowed for businesses.
Across the Atlantic, the arguments for increasing the charitable mileage rate are lodged not only by Volunteering England and other charity advocacy organizations, but the AA Motoring Trust, a counterpart of sorts to the AAA here. As they see it, there is no difference in actual cost and importance between mileage driven in personal cars for business purposes and mileage incurred by volunteers for charities.
There’s more.While one might debate whether 40 pence is enough, it was established as the Approved Mileage Allowance Payment (AMAP) by Her Majesty’s Revenue and Customs (HMRC) based on an analysis including not only the cost of “petrol”, but “wear and tear” on volunteers’ cars and the cost of insurance, the real costs of driving, not simply picking numbers out of the air.There’s even an extra “passenger payment” rate of 5 pence per mile “for carrying fellow employees in a car or van on journeys which are also work journeys for them.”The British government even devised the mileage reimbursement rate as the same for all cars, as opposed to earlier formulations, to encourage drivers to shift to smaller, petrol-conserving vehicles.
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In other words, whether one agrees with the HMRC calculations or not, much less whether the rate should have been raised above 40 pence (set in 2002) due to the gas crisis, there is a real analysis behind the numbers.If a British charity feels it can demonstrate that 40 pence is not adequate for its particular circumstances, it can even petition HMRC for a higher reimbursement allowance.
In the U.S., it’s hard to discern the government’s calculus behind 14 cents or 41 cents or some other figure as an accurate reflection of the real cost of a volunteer’s driving for to help carry out a charitable service.It’s high time that nonprofits—and their hard-working volunteers—are compensated for real costs rather than being nickel-and-dimed to death.
Perhaps a little of the second class treatment of charities by Congress is self-inflicted damage by the sector.It’s hard to read anything lately that isn’t vaguely dismissive of “charities”—“alms-givers” is the condescending term of choice–that basically serve people, hardly sexy and exciting stuff for glossy magazines.But the impact of ridiculously low charitable mileage deduction is real for people who depend on volunteers with cars to deliver services:
- In Maine, the Katahdin Area Support Group reports struggling to find volunteers to drive patients to chemotherapy and radiation appointments in Bangor (“Gas Saps Volunteer Drivers,” Bangor Daily News, July 8, 2008).
- Serving Multnomah, Washington and Clark counties in Oregon, Loaves and Fishes says that its volunteer drivers, 60 percent retirees on fixed incomes, are cutting back on their deliveries to the housebound due to high gas costs.
- In Elkhart, Indiana, the volunteer coordinator of the Salvation Army’s Mobile Meals program frequently personally covers for the shortfall in available volunteer drivers; some 90 percent of the volunteer drives are themselves retirees on fixed incomes.
- In Seattle, Senior Services uses volunteer drivers to bring food to the elderly and Lifelong AIDS Alliance drivers bring people to medical appointments; the drivers are asking for mileage reimbursements that they would have ignored in the past due to high gas prices.
Typically the volunteer drivers are themselves elderly or disabled or living on fixed incomes themselves.The reimbursement means something, and these volunteers are getting the short end of the stick with a deduction that doesn’t come close to meeting mileage, wear and tear, and other car-related costs.It’s high time that public policy advocacy like the push for the GIVE Act celebrates the work of nonprofits—yes, charities—that help people who might not be the most visible or popular constituencies for public or charitable largesse.
Let’s hope GIVE is passed by Congress before the campaign break sometime in September.But let’s also look at this issue as the canary in the coal mine revealing a serious problem in the sector.
Despite the politicians’ lip service, many clearly don’t treat the nonprofit sector all that seriously, particularly if the nonprofits are those gritty community-based groups serving populations that many would like to keep out of sight and out of mind.They like the Hollywood celebrities pitching their favorite charitable causes, they attend black-tie charitable fundraisers, they’re taken—or sometimes snowed—by the self-congratulatory nonprofit social entrepreneurs, and they have close relationships frequently with the national think tankers.But they don’t really get the dynamics of on-the-ground nonprofits and their crucial services to people in need—as a decade of a 14 cent charitable mileage rate demonstrates in spades.
The nonprofit sector needs to get the charitable mileage deduction for volunteers changed.Then it has to work on changing the public treatment of nonprofits and volunteers as places and people you can persistently short change and underfund.