News and analysis
December 18, 2012

Nonprofits Split on Supporting Obama Tax Plan

Richard White/Chronicle of Philanthropy

The White House’s request that nonprofit leaders support President Obama’s tax plan has caused a split among the biggest charitable organizations.

A handful of large groups are backing the president, while others have resisted taking a political stance.

But few organizations have taken the White House’s suggestion to back off the main thrust of their advocacy in Washington: protecting the charitable tax deduction.

Senior Obama administration officials made their case two weeks ago in a meeting at the White House with 13 leaders from national nonprofit coalitions, saying that charities could better make the case to preserve the charitable deduction if the president succeeds in increasing taxes on the wealthy.

The administration urged nonprofits to publish newspaper op-ed articles and issue public statements declaring their support for the higher tax rates.

Four Voice Support for Higher Taxes

Four of the 13 groups whose leaders attended the White House meeting have publicly supported tax rate increases—including Independent Sector, the coalition of 600 nonprofits; the National Committee for Responsive Philanthropy; the Association of Public and Land-Grant Universities; and Catholic Charities USA.

Lorie Slutsky, president of New York Community Trust, attended the White House meeting and voted as an Independent Sector board member in favor of that group’s statement supporting tax increases. But Ms. Slutsky’s organization is not taking a position on taxes.

Her group’s neutrality on taxes is similar to those of six other organizations with representatives at the White House meeting, all of whom have said their only advocacy role will be to fight to preserve the charitable deduction.

“My organization has never taken a position on tax rates,” said Steven Woolf, senior tax policy counsel at the Jewish Federations of North America. “We always try to take policy positions based on the best interests of our stakeholders rather than on partisan politics.”

Also taking Mr. Woolf’s stance are the Association of American Universities and the National Association of Independent Colleges and Universities and three organizations that are members of Independent Sector: the American Heart Association, the Council on Foundations, and United Way Worldwide.

Two other organizations whose leaders attended the meeting, City Year and Meals on Wheels Association of America, have not responded to The Chronicle’s questions about whether they plan to take a public position, but so far neither group has issued a statement.

Staying Away From 'Political Wrangling’

Other groups that represent charities and donors—including the Alliance for Charitable Reform, an advocacy group established by Philanthropy Roundtable, and Leadership 18—have also declined to take a stand on tax rates and say they will focus exclusively on preserving charitable deductions.

The Alliance for Charitable Reform was the first to publicly rebuff the White House’s request, saying charities “should not be forced to enter this political wrangling.”

The alliance’s position clearly contrasts with the unambiguous support for the White House expressed by Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy who attended the White House meeting. In a blog post Mr. Dorfman wrote: “If nonprofit leaders don’t want changes to the charitable deduction, it is imperative that we get behind the President’s call for higher tax rates on the wealthy.”

Op-Eds Reinforce Tax Position

Nonprofit coalitions are not just issuing statements but are writing op-eds.

Soon after Independent Sector issued a statement saying that it would support President Obama’s idea to raise taxes on the wealthiest 2 percent of Americans, Catholic Charities USA’s president, Larry Snyder, joined Stephen Heintz, chairman of Independent Sector’s board and president of Rockefeller Brothers Fund, to post an op-ed article in The Huffington Post.

“A deficit-reduction plan that includes a modest tax increase on the 2 percent who can most afford it is our best hope for moving ahead in a fair and balanced way,” wrote the two leaders in an article with the title “The Case for Higher Taxes.”

And another prominent nonprofit leader, Emmett Carson, chief executive of Silicon Valley Community Foundation, wrote an op-ed in the Silicon Valley Mercury News, that declared: “We must raise new revenue, including increasing some tax rates.”

Traditional Allies Don’t Agree

The decision by some groups to stand with President Obama shocked some nonprofit leaders. Mr. Woolf said he was surprised by Independent Sector’s decision because it is a “broad-based organization that is trying to support many different issues and appeal to as many different parts of the philanthropic spectrum.”

He says “that makes it difficult to take positions on contentious political issues such as raising and lowering tax rates.” The Jewish federations ended their membership in Independent Sector last year because Mr. Woolf says it couldn’t afford the dues.

The fiscal-cliff debates have put some traditional allies in different camps.

In November the Association of American Universities and the Association of Public and Land-Grant Universities sent President Obama and Congressional leaders a joint letter from their presidents—who both attended the White House meeting—that called for tax reform to raise revenues. [Editor's note: The previous sentence has been revised to clarify what the letter said.]  The statement did not, however, support a specific policy position.

Last week an Association of American Universities spokesman, Barry Toiv, said the group “has not taken a position on increasing tax rates” while the Association of Public and Land-Grant Universities’ president, Peter McPherson, sent a letter to President Obama and Congress stating: “Some tax rate increases will be necessary.”

A third higher education organization, the National Association of Independent Colleges and Universities, said this week that it remains focused on the charitable deduction and that it “cannot take a position on the proposal to raise the tax rates on the top 2 percent,” according to the group’s spokesman.

Diana Aviv, chief executive of Independent Sector, says she’s not surprised to see differences on tax policy among nonprofits.

“We have come together around the charitable tax deduction,” she said in a conference call. “There are differences of opinion on rate increases and cuts.”

Send an e-mail to Doug Donovan.