Gongol.com Archives: August 2022

Brian Gongol

August 7, 2022

Business and Finance Doing the hard work

A healthy society places a premium on building capacities -- for individuals, for institutions, and for society as a whole. Building capacity means expanding the internal means of being able to do what is necessary and productive. ■ Americans fund and otherwise encourage the education of young people in no small part because it is an exercise in capacity-building: Helping youth to become self-sufficient members of society later on, both economically and civically. When we fail to do this, society pays the price in a variety of ways: Through under-employment and unemployment, through counterproductive voting, and through other forms of avoidable decline. ■ In the process of developing young people, we risk making the mistake of communicating to them that all time spent in community service is equally valuable. When people are young, they lack most forms of specialized skill. Thus, the best ways to put their energies to use take the form of low-value labor: Volunteering at a soup kitchen, lifting drywall at a Habitat for Humanity build, or soliciting donations to walk-a-thons and dance marathons. ■ These are all fine and noble activities, and it is usually good to mass lots of labor around them, especially when the people contributing their time have more of that than they have cash to donate. But there comes a time not shortly after one enters adulthood when their time becomes modestly more valuable (because their capacities have been built up). The college graduate who embarks on a career that earns $55,000 a year needs to value their efforts at $27.50 an hour. In those circumstances, it may make more sense for them to give $100 to a good cause than to spend four hours volunteering -- if, with that $100, the charity can obtain more value than it would have obtained from four hours of median-value volunteering. ■ But after a period of time, experience (and, hopefully, more capacity-building) makes the individual even more valuable, sometimes in particular areas where their skills are of special worth. The classic case is that of the attorney, accountant, or other professional who works on a pro-bono basis for a good cause (often as a way of fulfilling certain expectations on the way to a partnership). ■ Many other forms of work can be particularly valuable, too, beyond the conventional professions. And it would be highly pro-social to communicate to those idealistic young people (whose volunteer time is appreciated merely because it comes cheap) that they can do a real service to society by building their own capacities so that they can not only earn a living, but also commit some of their specialty skills and knowledge to solving important problems on behalf of worthy community goals later on. ■ Our tax code doesn't recognize this, and that's a failing. Someone can donate the cash required to hire, for instance, a computer network administrator, and obtain a deduction for the full value of the check they write. But the network administrator cannot simply donate their time and then take a deduction for the market value of what they've donated. It's a silly distinction, particularly because it then makes cash alone appear to be more valuable -- which contributes to the unfortunate pattern of over-professionalizing our entire non-profit sector. ■ More operations would work better if there were a clear way for people who care about a cause to devote their best efforts directly to it, and then receive the same kind of tax treatment they would receive if they had paid for someone else to do it. But it would also signal to high-minded individuals that their capacities are as valuable as their time alone, and with greater capacities come greater opportunities to give.