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May 2004 Online Calculator Rethinks Tithing
Psychologists tell us we become conservative when uncertain. Claude Rosenberg, MBA '52, knows most affluent Americans are uncertain about how much they can afford to give to charities without endangering their lifestyle or running out of money before they die. The result is that many procrastinate on giving what they could afford and often don't get to see the good their money could bring. Having made his fortune as a money manager, Rosenberg now hopes to reduce such procrastination with a new Internet calculator called PrudentPal available on the website Newtithing.org. Based on research by his nonprofit NewTithing Group, PrudentPal was three years in the making and resides on a secure server so no one but individual users can see their personal financial picture. A person who types in his or her income, investment status and tax filing status will receive a calculation of the after-tax cost of current giving. By providing a little more information, a user can get an estimate of what his or her maximum gift could be—based on personal tax or investment preservation goals. "Go ahead and use it, because it won't cost you anything and we believe it will be helpful," Rosenberg advises those who have sizable assets above and beyond their homes. In the 1990s Rosenberg pioneered mathematical techniques for correlating various investment market returns with Internal Revenue Service data to estimate what people in the top four income categories are giving and can afford to give. The calculator now takes into account seven years of data on asset value. "We have learned some things no one else knew about American wealth," says the longtime philanthropist. Recently, for example, his group found that Americans with income of $1 million or more on their tax returns made a third of their charitable giving in cash. If they had given appreciated assets instead, the tax laws would have allowed them to pay fewer taxes and freed up an additional $1 billion to give to charities without changing their own financial positions. |
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