As part of the larger debate on Capitol Hill about jobs, deficit reduction and increasing taxes on the wealthiest Americans, the Senate Finance Committee and the Joint Select Committee on Deficit Reduction (aka the Supercommittee) are considering proposals that would increase tax revenues by limiting the deductibility of charitable donations.
But over 2,000 nonprofits agree that the only thing this will limit is their ability to provide services to people in need.
As United Way Worldwide CEO Brian Gallagher recently testified before the Senate Finance Committee, although tax incentives may not determine if people donate, they are a factor in how much they give. In his testimony, Gallagher cited recent studies that claim a cap on the charitable deduction would reduce giving by $5.6 billion per year. For the United Way, a 2.5% drop in revenue would translate to 1.3 million fewer times it could provide job training, home care for the elderly, supportive housing, or mentors for at-risk students.
To date, twenty-five national nonprofits and over 2,000 regional and local nonprofits have signed an open letter organized by the National Council on Nonprofits urging policymakers to preserve the charitable giving incentive. Read the letter for yourself, view a list of participants including American Red Cross, Easter Seals, the Association of Fundraising Professionals, and Habitat for Humanity International, and sign on if you agree with them … quickly though. The deadline to sign the letter is close of business Thursday, November 3.
What do you think of the proposed charitable deduction limits? Would your nonprofit be affected?