October 15, 2012

Charitable Deduction Should Be a Constitutional Right, Says Lawyer

The fate of the charitable deduction worried many of the donors, grant makers, and nonprofit experts gathered in Palm Beach, Fla., on Thursday for the opening of the Philanthropy Roundtable’s annual conference.

Loss of the deduction would be so devastating to philanthropy, said one legal expert, that she urged donors and other nonprofit advocates to push to amend the Constitution or the federal tax code so that a donor’s gross income would be reduced by the amount he or she contributes to charity.

“Stop calling it a deduction and start calling it an incentive,” said Cleta Mitchell, a lawyer who advises nonprofits, corporations, and political candidates and campaigns. “If you give money to charity, it should not be defined as income.”

Sandra Swirski, head of the Alliance for Charitable Reform, a coalition of foundations and donors, said she feared reductions in the amount people can deduct would cause large numbers of people to hold back on their giving.

President Obama has proposed capping all deductions at 28 percent for the wealthiest Americans, while Mitt Romney has said he would limit total deductions to $17,000 for middle-class families and less for the wealthy.

Ms. Swirski urged grant makers and other donors to gather information from the groups they support that shows  the value and importance of charity tax breaks and use it to make the case to lawmakers to keep the deduction intact.

Dig deeper: See The Chronicle's special section on the charitable deduction, including a look at the latest research and proposals.

Send an e-mail to Maria Di Mento.