The Washington times., 1937-01-28
NEW TAXATION
MENACE TO
CHARITIES

(IHe acute pTOOLemS FACING
priunte charitable institutions
because of the exhaustion of
sources of philanthropy and the
tendency toDdrd system OF
estate medicine" is continued
in the third of series OF drtt-
cles dedlino 7Dith the SitudttonD
Faced with a paralyzing decrease
Of direct private endowments, as
result of depression uncertainties,
charitable institutions heretofore
maintained solely through indi-
vidual bequest face further han
dicap because of the Governments
policy in taxing huge estates.
Commenting on the effects OF
the revenue act, as it applies to
residuary legacies, the current
popular form of bequest, local
banking officials who are familiar
with the dilemma facing owners
of large estates feel certain char
tiles must either find other means
of financing or face extinction as
private" institutions.
Baird Airs Views
Bruce Baird, vice president OF
the National Savings and Trust
Company in charge of trusts, Is
one of those who sees in the pres
ent tax program the ultimate
destruction of private charitable
institutions. He says:
"There have been many large
estates wiIIed recently, in which
revocations of bequeSts have
been made. One can only give
what he can, and taxes on big
estates amount to cOnflscatlOn.
Consequently we find that per-
sons, though reluctantly, are
forced to let the charities Shift
for themselves.
"CharitieS usually suffer be-
cause taxes, to a larger extent
come out of money or property
earmarked for charity. Natu-
rally, the depression has taught
that persons must first take
care of their families and think
of charities secondly"
SEE u. S. CONTROL
Other men go a step further
and predict the taking over by
the Government of functions now
performed by many private hos
pitals, Rockefeller and RosenWald
Foundations, colleges and research
institutions. Mr.. Ord Preston,
president of the Union Trust Com
pany, is among those who foresee
such a development. He says:
"If the taxes are going to con.
tinue being so burdenSOme that
persons fear for their estates,
charities will be the ultimate
sufferers.
"An alternative may have to
be higher direct taxes with
percentage of exemption on
charitable bequeSts during ones
lifetime.
"a continuation Of our pres
ent forms of taxation means
only that charities will suffer.
The State will have to take care
of them"
PEOPLE IN DARK
That many persons are not cog
infant of the situation created by
this latest deterrent to the exist
ence of private charitable inStitu-
tions was the expression OF
Thomas j. Groom, vice president
of the District of Columbia Bank
ers Association. who said:
81 don't think people realize
the seriousness of this situation
as yet, but when they do the act
will have to stand change. There
is no doubt that unless the rev.
enue act is changed a mos
serious effect upon private char
liable institutions must occur"
B. B. Sandidge, superintendent
of Emergency Hospital, reciting
the experiences of his institution,
said there has been a noticeable
decrease in endoWments in the
form of residuary legacies Of late.
He cited the report submitted by
Emergency Hospital to the Board
of Public welfare last year refer
ring specifically to the following
excerpt:
In late years philanthrOpiC
gifts have decreased"
HOSPITALS HARD HIT
The necessity of caring for many
more non-paying patients than
ever before is one of the bugabooS
facing hospitals, Sandidge said,
and the loss of money from en-
dowments makes the situation
critical.
The head of the board of di-
rectors of one of Washington's
largest hospitals, when asked
about the effect upon his inStitu-
ton of the revenue act, remarked
as follows:
"It's perfectly obvious that
the hospitals, colleges, art CALLER
les and other institutions will
suffer. All of this increased tax
alton must be met. The Amer
ican people have to pay the bills
anyway"
RUGHFD IFWFI