Congress is currently addressing a number of critical issues which will impact the charitable community. Changes in funding will in many cases, place greater responsibilities on the charitable sector to find additional resources where budget cuts will impact numerous programs. Concerns about healthcare reform are paramount for all of us. Tax reform is another area of similar concern for all charities.
Tax deductions play a crucial role in the success of the charitable sector.
It does not seem possible that as the United States celebrates one hundred years of inclusion of the charitable tax deduction provision, that our nation’s elected leaders are seriously considering its repeal or so seriously restricting it that it will be rendered ineffective.
There is plenty of great analysis out there to explain how the repeal or other drastic measures will impact the charitable sector. It is imperative that our sector educates legislators and the general public about the significance of such changes. Our organization is a member of the Charitable Giving Coalition, whose sole focus is to retain the charitable deduction. We constantly remind our NCDC members to advocate for the deduction, as do so many other national charities and associations. There is little doubt that the repeal of the deduction would create serious consequences for the charitable sector in terms of millions of dollars in lost charitable contributions. This is very important to recognize.
Legislative changes present both a financial dilemma and a moral dilemma.
The obvious dilemma for our sector is that at the same time that the charitable deduction is under scrutiny in tax reform bills, Federal budgetary cuts in services will require charities to find even more resources to bridge the gap in funding and services to those most in need. Simply put, the needs and numbers of those who use our services and assistance will increase at the same time that we may experience a decrease in giving. This is more than just a financial dilemma. From my perspective, it is a moral national dilemma. As a nation, are we losing our moral integrity when giving to charity, which has been a hallmark of our greatness as a nation, is no longer encouraged and affirmed by its government. Is there not something wrong when large corporations can receive “tax break incentives” but we question providing incentives for charitable giving?
Our nation has a proud history of charitable giving.
In 1830 de Tocqueville wrote about his “daily astonishment” and the “immense works” carried out by an abundance of voluntary associations. Groups of ordinary people worked together to solve community problems. The Giving USA Report that is published in June each year continues to indicate that the greatest percentage of money raised annually comes from individual personal gifts, not trust funds, foundations or corporations. It is estimated that more than 60% of Americans donate their time or resources. That is a higher percentage than citizens of any other nation in the world and by a wide margin.
The tax deduction for charitable giving was a way for the nation to recognize, affirm and encourage generosity of its people. We were the first nation in the world to do so. Today almost every economically developed country has followed the United States in creating a tax deduction for charitable giving.
Donors should be recognized and appreciated for their generosity.
After one hundred years, perhaps, it is time to expand the charitable giving deduction to recognize and affirm the generosity of all Americans by allowing charitable deductions to be taken “above the line.” Perhaps, it is time for our country to recognize the generosity of all Americans, including the large majority who do not itemize their deductions. Perhaps, it is time for us, the charities who are supported by so many middle-class Americans, to take a stand to protect and expand the charitable tax deduction. These donors deserve the appreciation, affirmation and encouragement to give even more generously just as much as our wealthiest citizens.
As charities, we know it is all about our donors. As charities, then, let’s make our voices heard, and not just for the sake of our causes, as important as they are. Let’s do it for the sake of our donors, who deserve not just our appreciation but the affirmation of a grateful nation. The Greeks told us long ago that the greatness of a society is measured by how well it provides for those most in need. The generosity of ordinary American citizens is unparalleled in the world. The charitable tax deduction affirms that.
Our donors give our missions sustainability, vitality and a future. Our donors, through their generosity, witness to what is the hope and strength of our nation. Through their gifts, they say “we care.”
We care as individuals and we care as a nation. It is time for our nation’s leaders to recognize giving is part of the moral fiber of the people. It is at the heart of who we are as Americans. Our Congressional Leaders need to retain and expand the charitable tax deduction because it is the right thing to do. It is the American thing to do. We need to compel them to do so. Our donors and our causes deserve our best efforts.