The Heat is On: Tamper with the charitable deduction and communities, needy lose
Special to Philanthropy Journal
Rev. Larry Snyder
Nonprofit organizations that depend on the generosity of donors are currently facing an urgent threat as Congress considers proposals that will upend the charitable tax deduction.
The Senate Finance and House Ways and Means committees have presented tax reform options to modify the charitable deduction as they consider overhauling America’s tax system. The Charitable Giving Coalition, a group of more than 60 diverse nonprofits, foundations and other charitable organizations serving communities across the nation, is working to ensure there is a clear understanding of how tampering with the charitable deduction could impact giving and hurt those who need help the most.
According to a new report issued by Giving USA, those who itemized their charitable contributions made up 81 percent of the total estimate (nearly $229 billion) for giving by individuals in 2012. If lawmakers reduce the value of the deduction, other research shows that billions in donations would be lost each year and vital services and jobs could be cut or eliminated.
Consider the millions who depend on a network of highly effective, compassionate organizations across the country that provide jobs, economic development, food, shelter and more.
For instance, on an annual basis, Catholic Charities USA’s network of local agencies across the country raises more than $679 million of contributed income. In fact, many rely on individual donors for more than half of their contributed income to provide funding to:
In addition, each year, crisis shelters and rehabilitation centers run by members of the Association of Gospel Rescue Missions use private donations to provide:
The Salvation Army also relies on the generosity of Americans to provide food, disaster relief, assistance for the disabled and support for disadvantaged children, the elderly and the homeless.
The organization delivers assistance to:
Nearly 60 percent of the $2.8 billion in donations received by The Salvation Army in the United States in 2011 came from individual donors. Some Salvation Army units receive more than 75 percent of their funding from individual donors.
Throughout America, some 1,200 United Way chapters:
Conservative estimates indicate that limiting the charitable tax deduction could reduce giving by a minimum of 2.5 percent for United Way. That translates to $104 million, or 1.3 million fewer times that United Way could provide job training for an unemployed worker, home care for an elderly citizen, supportive housing for a single mother or a mentor/tutor for an at-risk youth.
Since the recession started, Jewish United Fund agencies experienced a 368 percent increase in demand for community support that served:
Museums throughout America are sources of inspiration, jobs and economic activity:
These vital sources of jobs, services and support depend on donations spurred by the charitable tax deduction. If lawmakers tamper with it, nonprofits lose their ability to provide food and shelter for the most vulnerable, support education and better health, strengthen communities, solve problems and more.
Let’s be clear, the nonprofit sector’s role in our communities is not a loophole for the rich. It is a lifeline for those who need it most. At a time when the need for crucial services is on the rise, we should be working to find ways to encourage more giving, not less.
Rev. Larry Snyder, president of Catholic Charities USA, is a member of the Charitable Giving Coalition, which is dedicated to preserving the charitable giving incentive that ensures that our nation's charities receive the funds necessary to fulfill their essential philanthropic missions.