Many nonprofit organizations in New York are deeply concerned they will lose significant contributions from wealthy donors if a pending state budget proposal becomes law. The proposal would reduce the charitable-contribution deductions allowed for individual donors who are “high earners.”
Gov. David Paterson and the state legislature are in a bitter battle as they try to finalize a budget during the bad economic times, but they apparently have agreed on a proposal that would allow the approximately 3,500 New York taxpayers who earn more than $10-million annually to deduct on their state tax returns only 25 percent of their charitable contributions rather than the current 50 percent.
The change could generate up to $100-million in extra revenue for the state, according to the New York State Division of the Budget.
The Chronicle’s Philanthropy 50 list of the Americans who gave the most money to nonprofit organizations in 2009 includes eight New Yorkers, including New York City Mayor Michael Bloomberg, who contributed $254-million in 2009.
The state budget proposal on charitable deductions comes as three of America’s richest people—Warren Buffett and Bill and Melinda Gates—have urged the nation’s wealthy to commit at least 50 percent of their net worth to charity.
“Many charities and nonprofits in New York City are outraged by this last-minute proposal to raise money, saying it would discourage many wealthy individuals and businesses from wanting to give, especially at a time when not-for-profits are reliant more than ever on charitable donations to survive the recession,” said the Human Services Council of New York City, in a statement.
Michael Stoller, executive director of the Human Services Council, added: “Any proposal that could possibly decrease private giving is going to be a disaster for all nonprofits in New York City and throughout the state. The state cannot balance the budget on the backs of those in need.”
The New York City Employment & Training Coalition urged organizations to contact lawmakers to plead that the charitable-contribution deduction for wealthy individuals be left alone.
“This affects your donors and their incentive to support your programs,” the coalition said. “Harsh state and city budget cuts already threaten our programs. Private donations are one of few ways to raise the revenue we need.”