October 25, 2012

Nonprofit Leaders Urge Obama and Romney to Protect Tax Break

Leaders of big nationwide nonprofits sent letters to President Obama and Mitt Romney on Thursday urging the presidential candidates to reconsider their proposals to cut the charitable tax deduction. (See the letter to Mr. Obama and the one to Mr. Romney.)

The leaders also announced that they have scheduled a gathering on December 4 and 5 to bring hundreds of its members to Washington to tell members of Congress that any tax changes that led to decline in private giving would devastate nonprofits and the people they serve.

Among the organizations that sent the letters were the Salvation Army and United Way Worldwide and nonprofit coalitions like the Association of Fundraising Professionals and Independent Sector.

“Any proposed cap would have long-lasting negative consequences on the charitable organizations upon which millions of Americans rely for vital programs and services,” said the group of charities that together call themselves the Charitable Giving Coalition.

Mr. Obama has proposed several times to limit the charitable deduction to 28 percent—instead of the current 35 percent—for individuals earning more than $200,000 and families earning more than $250,000. Congress has never gone along with that kind of limit, in part because of strong charity opposition.

Mr. Romney has not been specific about his tax plan, but he has proposed to limit the amount of deductions people could take over all and in a recent debate, suggested that people could choose whether they wanted to take deductions for housing or charitable giving if they went over the limit.

The letters to the candidates also stated:

“The charitable deduction is different than other itemized deductions in that it encourages individuals to give a portion of their income to support worthwhile causes,” the letters said. “It rewards a selfless act, and it encourages taxpayers to give more funds to charities than they would otherwise have given. Data suggests that for every dollar a donor gets in tax relief for his or her donation, the public typically receives three dollars of benefit. No other tax provision generates that kind of positive public impact.

“People give to worthwhile causes for many reasons—incentives such as tax deductions being among them,” the letters continued. “Tax incentives make more and larger gifts possible. The federal government has acknowledged this trend. During times of crisis, such as the natural disasters like Hurricane Katrina, the 2008 Midwest flooding and the 2010 Haiti earthquake, Congress regularly passes charitable giving incentives to make it easier for Americans to give donations and support to nonprofits serving individuals, families and communities in need.”

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 Doug Donovan.