Philanthropy Plates: A Decade In Retrospect

by Roger

Salvor and Angela Jardin drive a 2018 Accord and an even older mini-van. Proudly displayed on both vehicles are their Silver license plates.

“To give any less has never been a consideration,” Mr Jardin explains. “In both our families, we were expected to give back — to put more in than we take out.  It’s how we were raised. We’re Silver, and honestly, hope to become Gold after we pay off our student loans.”

It has now been ten years since Philanthropy Plates were first approved in California by voters in 2015. Already they are shaping up as one of the most significant and unexpected socio-political changes of the century. As such, the senior editors of the Ordinary Times (as of August 2024 the most highly read site on the internet) have asked me to write a recap on the history and impacts of the movement.

As most of us know, Philanthropy Plates originated as a way to encourage charitable contributions.  The precursor to the idea was California’s Proposition 15, better known as the Buffett Rule. This ill-fated initiative was aimed at recognizing people that gave more than ten percent of their income (above that determined by their tax schedule) to the state or federal government. For example, if their expected tax rate was thirty percent, if the individual or couple gave forty percent, they would be recognized with special vanity plates that recognized their contribution

The Buffett Rule went down in flames back in the 2014 ballot process, being viewed as both elitist and ineffective, as few voters believed anybody would actually give more in taxes than they owed.  It was, in other words, a case of pointless political posturing; a conservative ploy to shut up wealthy elites asking for higher tax rates.

Everything changed the next year though when conservatives and liberals joined forces and built upon the idea with the concept of Philanthropy Plates. The rationale, originally suggested by “Bleeding Heart” Libertarian Hugh Mallow and Progressive Albert H. Reich, was to incentivize voluntary giving above and beyond the scope of taxation — with no requirement or expectation that the additional funds would go to the state or federal government.

The concept applies gentle social pressure to giving and charity.  In Reich’s words, it “uses status displays to incentivize an arms race over philanthropy — encouraging people to give as much as possible to others.” Instead of engaging in wasteful status contests of living in larger mansions, wearing designer clothes, or owning more opulent yachts, Philanthropy Plates allow people to display what they do to contribute to others.

The original California process was as ingenious as it was simple. On their state tax form, the taxpayer’s charitable deduction was compared to their gross income.  If greater than two percent, the person/couple got a Blue license plate for all cars for the next year.  If greater than five percent they got a Black plate. If greater than ten, Silver, and if greater than fifteen, they received the coveted Gold plates (all using inexpensive 3D color printing technology).

The difference from the Buffett Rule of course was that the contribution could now go not just to the state (which virtually nobody gave to), but also to local homeless charities, to cancer research, to environmental causes, or to the religious organization of one’s choosing.  People now had a way of signaling to others their voluntary contributions to causes that they believed in.

Conservatives loved it as it encouraged philanthropy toward the church and to human welfare outside the purview of big government. Liberals loved it as it encouraged redistribution to the disadvantaged and huge donations toward environmental causes.  Libertarians loved it because it was voluntary, using softer, decentralized social pressure rather than coercion.

“Americans are car people” says Reich. “Our cars are an extension of ourselves.  The idea that Hugh and I had was to capitalize upon our tendency to project and display our persona in what we drive.

The result of course was to establish a system which publicly displayed car owners’ philanthropic commitment to their fellow humans.  Every time they drove their car, they effectively signaled their altruism (or lack thereof).  Some continued on with their standard license plates, but others were able to proudly display a Blue, Black, Silver or Gold plate.  Within months of implementing the program, those who did not have “Color Plates” began requesting mid-year plates.  The DMV had to create a program just to reissue new Color Plates (at a slight charge) when people proved their philanthropy via mid-year contributions.

It quickly became expected for a person of good standing to have Philanthropy Plates.  At first, Blue was sufficient, but quickly, just as Reich expected, an arms race began.  People wanted to display Black as a status symbol.  Then by 2018, Silver became the new Black. The pressure was especially pronounced among owners of luxury cars.  It became crass to drive a BMW, Audi or even a Prius without having at least Black status.  Those most concerned with their status, such as celebrities, politicians, doctors, lawyers, local business owners and corporate executives would not consider being seen in a car which did not have Gold plates.

“When I started with Goldman Consulting, my first career conversation turned to Philanthropy Plates,” explained recent Harvard grad, Harry Seldon. “My boss told me that to get ahead it was essential that I looked the part, acted the part, and that I displayed that I was a caring person and team player. She asked me to look around at what the executives drove.  It was all Silver and Gold. The implications were pretty obvious. Color Plates are the new power tie.”

The immediate result of California’s Philanthropy Plates was a 78% first-year increase in charitable giving. However, this continued to grow, and ten years later has risen to an unexpected 371% increase in philanthropy to a full spectrum of causes.

By 2020, eighty four percent of registered cars in California had Color Plates, with almost half of these at Silver level or above. The movement has also reversed the trend of increasing inequality in wealth.  Clearly the higher income groups have given disproportionately.

The Idea Spreads and Evolves

Within a year of starting the program, a wave of copycat states took up the torch, supported strongly by various interest groups and charities receiving the donations. In 2016, fifteen states adopted their versions of Philanthropy Plates, all using the same color scheme.  In Massachusetts, they expanded the idea by adding a Platinum level at 20% or above philanthropy level.  By 2021, all states and had implemented Philanthropy Plates, most with the new Platinum level.

The idea has also spread to 14 other countries, including China, where there are now more Philanthropy Plates registered and displayed than in the US.

Along the way, various other experiments, improvements or twists have been added, to varying success:

Starting in 2016, the top charities (in terms of annual receipts) were specifically listed on tax forms and web sites, allowing the taxpayer to donate as they filed.

Utah and Texas experimented, disastrously, with the idea of reverse Philanthropy Plates. The idea was to “shame” recipients of government welfare by requiring them to have Green plates. The voters and their representatives in both states rejected this idea as it seemed to violate the spirit of the initiative.

Several states experimented with extending the range of charity to political organizations, with extremely negative results. The feeling was that it incentivized all the wrong activity. When a CEO displayed their Gold or Platinum plates, people wanted to know it went to helping the less fortunate, or protecting the environment, and not toward increasing their sway in politics.  As of 2023 no states allowed political contributions to count toward their plates.

Colorado and Tennessee experimented with providing benefits such as special high occupancy lane privileges for those with Silver or Gold. The idea backfired. In both cases it reduced the status of the tag.  It shifted it from being about helping others to again helping one’s self.

France experimented with using a third party to confirm donations as a percent of income rather than connecting the process to the filing of taxes. They successfully bypassed the state.

Currently several states and nations are experimenting with processes to count donations of time and service toward plates.

Summary

Philanthropy Plates has revolutionized charitable giving.  It has not just changed the scale of philanthropy it has extended people’s minds on the potential of voluntary aid.  In many states, rather than increasing tax rates for good causes, it has been suggested that they create special voluntary funds which allow citizens to donate some of their philanthropy in that direction.  For some types of charity it has worked well.  For others, less so.

What it has also changed is the nature of the debate.  People are now asking the same question as Angela Jardin; “why should we use taxes to fund something if nobody is willing to direct any of their own money toward it?”