News and analysis
July 13, 2017

Nonprofit Leaders Urge Pence to Expand Charitable Deduction

Alex Brandon/AP Images

Vice President Pence (center right) speaks with nonprofit executives Thursday at the Eisenhower Executive Office Building in Washington.

Nonprofit leaders Thursday called on Vice President Pence to protect and expand the charitable tax deduction in a face-to-face meeting in Washington.

Mr. Pence made no promises about what might happen to the charitable deduction, or other parts of tax law critical to charitable giving, amid Republicans’ efforts to rewrite the tax code. He did say the Trump administration’s commitment to cut regulations and replace Obamacare would spur giving by stoking the economy.

"Each of us knows charitable giving is fueled be generosity and by economic growth," Mr. Pence said in his opening remarks during the meeting. "This administration is all about growth. I can assure you of that."

Flanked by Fred Klipsch, founder of the Institute for Quality Education, a pro-school-choice policy group in Indiana, and Adam Meyerson, president of the Philanthropy Roundtable, Mr. Pence said job growth and a strong stock market are making Americans feel more confident than ever before.

"A more prosperous America can be a more generous America," Mr. Pence said. "I want to assure you the president and I are and our entire administration are anxious to get your counsel on how we might continue to promote economic growth."

The stop in Mr. Pence’s office was just one of many meetings for dozens of nonprofit leaders from across the country who descended on Washington Thursday. They were organized by a group called the Alliance for Charitable Reform, an effort propelled by Philanthropy Roundtable, one of several nonprofit associations and lobbying groups trying to protect the charitable deduction and other interests as Republicans look to simplify the tax code.

In addition to the meeting with the vice president, philanthropy leaders sat down with House Ways and Means Committee Chairman Kevin Brady, a Republican from Texas; Rep. Cathy McMorris Rodgers of Washington, who is the Republican conference chair; staff members from Senate Majority Leader Mitch McConnell’s office; and tax staff members from the Treasury Department.

‘Upbeat’ Meeting

Mason Rummel, president of the James Graham Brown Foundation in Louisville, said the 45 minute meeting with Mr. Pence was "upbeat and friendly."

Ms. Rummel said that while Mr. Pence did not make any firm policy commitments, the vice president said he appreciated the work of nonprofits and encouraged those present in their work.

Even though tax proposals circulated by House GOP leaders and the White House keep the charitable deduction intact, some nonprofit leaders fear charities would suffer. That’s because both plans would double the standard deduction, reducing the number of people who itemize individual deductions, including the charitable deduction.

Currently, 30 percent of taxpayers itemize their chartable gifts, largely people in the highest tax brackets. An analysis conducted by House Republicans shows that increasing the standard deduction would decrease that number to 5 percent.

To counter that, the philanthropy leaders laid out a case for a "universal charitable deduction." Such a plan would provide taxpayers a place to write in charitable gifts on their tax forms even if they don’t itemize other deductions, such as the mortgage-interest deduction.

In addition to Mr. Klipsch, Mr. Meyerson, and Ms. Rummel, according to the vice president’s office, the other foundation leaders at the meeting were:

  • John Jackson, Adolph Coors Foundation
  • Tom Riley, Connelly Foundation
  • Lawson Bader, DonorsTrust
  • John Tyler, Ewing Marion Kauffman Foundation
  • Holly Stubbing, Foundation for the Carolinas
  • Xavier Peña, Houston Endowment
  • Art Pope, John William Pope Foundation
  • Linda Evans, Meadows Foundation
  • Dave Wills, National Christian Foundation
  • Heather Higgins, Randolph Foundation

‘Indispensable Guardrail’

Mr. Meyerson of the Philanthropy Roundtable, whose membership includes some conservative grant makers, told Mr. Pence that the "charitable deduction is an indispensable guardrail against the intrusion of government into our lives and into our communicates."

The answers to some of the country’s toughest problems, such as the collapse of the family and underperforming schools, are to be found in churches and neighborhood leaders, he said. And the country needs more private giving, not less.

"Now is the time to increase charitable giving from 2 percent to 3 percent of GDP," Mr. Meyerson said. "Now is the time to make the charitable deduction universal so it is available to all Americans."

Mr. Pence noted that the contributions of the foundations represented at the table during the meeting "are immense and have changed lives across this country in incalculable ways."

The vice president said that he and President Trump were particularly grateful for support for school choice.

Delayed Plans

Republican leaders had expected to begin working on comprehensive tax reform this past spring. But that effort has taken a back seat as other legislative priorities, such as the health-care overhaul pending in the Senate and scandals brewing in the White House have come to the fore.

Policy makers assured the foundation leaders that a tax bill was still a priority.

"We heard a very consistent message from the House, the Senate, and the White House," said Ms. Rummel.

John Tyler, general counsel of the Ewing Marion Kauffman Foundation, agreed that policy makers seemed committed to completing a broad tax bill but said that because of the significant work ahead on health-care legislation and the budget, the timing for when debate on taxes would commence was a "moving target."

And while Mr. Pence and the congressional leaders didn’t offer concrete commitments to protect items in the tax code that help charities, Mr. Tyler said the meetings gave him hope.

"When the vice president of the United States wants to talk about the sector and its future, that sends a good message," he said. "It’s a really good sign to get to the top levels of government."

Correction: An earlier version of this article misidentified Ewing Marion Kauffman Foundation general counsel John Tyler as Mr. Kauffman.

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