After much speculation in recent days about the likelihood of passage of the CARE Act as part of the Katrina Tax Relief Act, Congress eliminated the CARE Act from the agreed upon compromise of the Senate and House bills on Friday afternoon, September 16th. What next?

Hurricane Katrina will undoubtedly result in an unprecedented outpouring of gifts to organizations involved in aiding the victims. That is as it should be. In coming weeks, however, after victims’ immediate needs for food, clothing and shelter have been met, it will become increasingly clear that only insurance companies, along with local, state and federal government will be able to realistically shoulder the task of financing the upcoming phases of the recovery process.

The philanthropic spirit nurtured by literally thousands of nonprofits over the years responded enthusiastically when those affected by Katrina needed it. No one would begrudge the diversion of funds to these needs in recent weeks. But the aftermath of 9/11 and the Tsunami reveal that donors will soon return their support to the organizations that address their long-term charitable interests. 

As we look ahead to the upcoming traditional giving season, we should keep in mind that many donors of moderate means have given sacrificially to aid storm victims. Others will see discretionary income that might have otherwise been donated, instead absorbed by rising energy costs this fall and winter.

The current environment demands focusing on the most fortunate donors. In many cases, a handful of donors will make the difference this fall. History reveals that those who have prospered in difficult times seem to know instinctively when it is their turn to step up. We must trust that these persons will recognize the need to continue supporting their core philanthropic interests in addition to the needs of those affected by Katrina.

Now is the time for America’s nonprofit community to remind donors why we have a business sector, a government sector, and a nonprofit sector. One of the legacies of Katrina will perhaps be to spark a renewed debate concerning the role of each of these sectors and how they should interact. The nonprofit community is inherently different from government and business. Katrina will illustrate that while insurance companies may replace drywall and government will repair the public infrastructure, only the nonprofit sector can help mend our intangible social fabric. 

The nonprofit community has no time to spare. No opportunity may be lost. Waiting for additional incentives from Congress in the form of the CARE Act is a luxury few can afford. Instead, those responsible for funding the vitally important nonprofit sector must take advantage of all the possibilities within existing laws. 

Most of what the CARE Act would make possible can already be accomplished under existing laws. See www.sharpenet.com/resources/pdf/katrina.pdf for a presentation that will be delivered tomorrow to the Chicago Planned Giving Council featuring examples of how to encourage donors to make gifts from retirement plans with or without the CARE Act (pages 16-21).

Americans will continue to care about their charitable interests, with or without the CARE Act. While additional tax incentives would be welcome and indeed desirable, they are but the icing on the cake. The nonprofit community cannot put the needs of its organizations and institutions on hold. The constituents served by the nonprofit community demand continued support and, thankfully, with your help, donors will continue to provide.

For additional resources, see links below.

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