Charitable Deduction | Federal
Feb 13, 2012
Charitable Deduction Central
NEWS
President’s budget proposals will likely dampen giving
2.13.12 - The President’s FY 2013 budget includes proposals that would likely result in a drop in private giving. Once again there is a proposed limit on itemized deductions which would reduce the value of the charitable deduction to 28% for families with incomes over $250,000 and there are recommendations for tax reform, including the “Buffett Rule”, which would significantly change the tax structure for higher income earners. Learn more and read our response to the budget.
President’s State of the Union Address
1.27.12 - Bloomberg BNA reports that The Obama Administration may be stepping back from its former proposal to cap charitable deductions at 28 percent despite a proposed increase to their incomes taxes.
ACR signs onto letter defending the charitable deduction
12.15.11 - Today, ACR and The Philanthropy Roundtable joined a coalition other nonprofit organizations across the country send a letter to Senate Finance Chairman Max Baucus reminding him of the importance of the charitable deduction during this giving season. Click here to learn more
RESOURCES
Following are resources that provide background on efforts at the federal level to impact the charitable giving.
- Quick Downloads: ACR Hill Packet, ACR Press Packet
- Essential Documents: Hill Packet, Press Packet, State Giving Profiles (compiled by Independent Sector), Giving by the Numbers
News
News stories we have highlighted and find of interest.
- 2/14/12 Charitable Deduction Proposal in President Obama’s FY 2013 Budget, BNA
- 2/13/12 Charities Oppose Obama Plan on Limiting Charity Write-Offs, Chronicle of Philanthropy
- 2/13/12 Obama Budget Plan Includes New Call to Limit Charitable Deduction, Chronicle of Philanthropy
- 2/3/12 ‘Buffett Rule’ Tax Bill Would Preserve Charitable Deduction, Chronicle of Philanthropy
- 2/3/12 Only Charitable Deduction Preserved in New Buffett Rule Tax Proposal, BNA
- 1/25/12 President Vows Not to Deter Wealthy From Giving, Chronicle of Philanthropy
- 1/24/12 Obama Lays Out Policy Proposals, Wall Street Journal
- 1/9/12 Nonprofit Views Offered by the Republican Presidential Contenders, Chronicle of Philanthropy
- 11/22/11 ‘Super Committee’ Breakdown Could Hurt Nonprofits, Chronicle of Philanthropy
- 11/20/11 Nonprofits Worry They’ll Take a Hit in Debt-reduction Proposals, Washington Post
- 11/1911 Charitable organizations struggle with how tax law changes will affect donations, Palm Beach Daily News
- 11/18/11 Secretive ‘Super Committee’ Gives Nonprofits a Super Headache, Chronicle of Philanthropy
- 11/17/11 Charitable Deduction Faces a Fresh Challenge as Lawmakers Attempt to Close Deficit, Chronicle of Philanthropy
- 11/17/11 GOP deficit reduction plan limits itemized tax deductions, health insurance tax breaks, New York Times
- 11/11/11 Charitable Deduction Not Discussed at Deficit Talks, Chronicle of Philanthropy
- 11/7/11 G.O.P. Talks of Limiting Tax Breaks, New York Times
- 10/26/11 Obama Tax Plan Would Have ‘Modest’ Impact on Giving, New Study Finds, Chronicle of Philanthropy
- 10/20/11 New Study Says Charities Could Lose Up to $3.2-Billion From Obama Tax Change, Chronicle of Philanthropy
- 10/18/11 Hatch Cites Impact on Charities if Tax Write-off is Cut, Washington Times
- 10/18/11 Hatch Urges Obama to Drop Plan to Cap Charitable Deductions, Bloomberg Business
- 10/18/11 Mormon Apostle to Senate: Keep charitable deductions, Salt Lake Tribune
- 10/7/11 Charitable Deduction Cap Pulled From Bill, NonProfit Times
- 9/29/11 19 Major Nonprofits Lobby To Keep Charitable Deductions, The NonProfit Times
- 9/27/11 A Cap on Tax Benefits for Donations in Obama’s Jobs Proposal Worries Nonprofits, Denver Post
- 9/23/11 Obama Scrambles Charities, Wall Street Journal
- 9/19/11 Arts groups worry about Obama’s plan to cut tax breaks for wealthy, Washington Post
- 9/15/11 Soak the Rich? No, Soak the Needy, Wall Street Journal (Fay Vincent)
- 9/15/11 Nonprofits Fight Proposal to Curb Charity Tax Breaks, Chornicle of Philanthropy
- 9/14/11 Lukewarm Response for Jobs Bill Payment Plan, Roll Call
- 9/13/11 Why Obama’s Jobs Bill Could Be Bad for Charity, Wall Street Journal
- 9/13/11 Obama’s Jobs Bill Includes Plan to Limit Charitable Deductions for the Wealthy, Chronicle of Philanthropy
- 9/12/11 White House Would Cut Deductions to Pay for Its Jobs Plan, New York Times
- 9/2/11 Campaign Urges Obama to Include Nonprofits in Jobs Plan, Chronicle of Philanthropy
- 8/1/11 Charitable Deduction Not Touched in Debt-Ceiling Deal, Chronicle of Philanthropy
- 7/24/11 Charity Groups on Edge over Possible Trim to Deductions, DelawareOnline (The News Journal)
- 7/22/11 Charities Can’t afford to Sit Out tax and Budget Debates, Chronicle of Philanthropy
- 5/4/11 Key Senator Asks Whether Charity Tax Break Is Fair to All, Chronicle of Philanthropy
- 4/29/11 Changing the Charitable Deduction Could Discourage the Most-Generous Donors, Chronicle of Philanthropy
- 4/29/11 Charity Tax Break Becomes Target, Minnesota StarTribune
- 3/27/11 Tax Break for Charitable Giving Targeted, The Hill
- 2/17/11 Charitable Deduction Cap is Ill Advised, Huffington Post
- 2/14/11 Budget Plan Brings Big Changes to Tax Incentives for Donors, Chronicle of Philanthropy
- 2/7/11 Q&A With Aaron Dorfman, National Committee for Responsive Philanthropy, PND News
- 1/26/11 A New Big Idea: Create Jobs And Reduce Poverty By Doubling The Charitable Deduction, Huffington Post
- 12/2/10 Nonprofits Fear Loss of Charitable Tax Deduction, New York Times
- 11/28/10 Charitable Deduction Under Scrutiny, Chronicle of Philanthropy
- 5/7/10 The Cost of Taxing Nonprofits, Huffington Post
- 5/6/10 John Thune Begins to Raise His National Profile, Washington Post
- 4/26/10 Charities Fear Tax Plan will Stifle Donations, Los Angeles Business Journal
- 8/7/09 Washington Update: Charitable Deduction and Social Innovation Fund, Chronicle of Philanthropy (Audio Interview)
- 2/26/09 Obama Plan Would Reduce Charitable Deduction for Some Wealthy Donors, Chronicle of Philanthropy
Research
Studies, reports and polling information on the impact of changes to the charitable deduction from a variety of sources.
- Academic
- Center on Philanthropy, Indiana University: Impact of The Obama Administration’s Proposed Tax Policy Changes on Itemized Charitable Giving (2011)
- University of California, Davis: How Does the Incentive Effect of the Charitable Deduction Vary Across Charities? (Published 2011)
- Center on Philanthropy, Indiana University: The 2010 Study of High Net Worth Philanthropy: Issues Driving Charitable Activities among Affluent Households” (2010)
- Center on Philanthropy, Indiana University: How Changes in Tax Rates Might Affect Itemized Charitable Deductions (2009)
- Boston College: Charitable Giving: How Much, By Whom, To What, and How? (2002)
- Urban Institute: The Cost of Giving: How Do Changes in Tax Deductions Affect Charitable Contributions? (2001)
Government
- Congressional Budget Office: Options for Changing the Tax Treatment of Charitable Giving (2011)
- Congressional Budget Office: Budget Options Volume 2 (2009)
- Congressional Research Service: Charitable Contributions: The Itemized Deduction Cap and Other FY2011 Budget Options (2010)
- Congressional Research Service: Economic Analysis of the Charitable Contribution Deduction for Non-Itemizers (2003)
Think Tanks
- Heritage Foundation:Obama’s Latest Proposal to Reduce Charitable Deductions Would Crowd Out Civil Society (2011)
- Tax Policy Center: Would Obama’s Plan to Curb Deductions Hurt Charities? (2009)
- Center for Budget and Policy Priorities: Proposal to Cap Deductions for High-Income Households Would Reduce Charitable Contributions by Only 1.9 Percent (2009)
- Association for the Study of Religion, Economics, and Culture: Income Tax Policy and Charitable Giving (2005)
Polls
- Dunham+Company: Three-fourths of Americans Favor Charitable Tax Deduction (2012)
- Fundraisers:White House Plan to Limit Charitable Deduction Would Take Toll on Charities (2011)
- Gallup Poll: Americans Oppose Eliminating Income Tax Deductions (2011)
- Dunham+Company: Americans Say the Charitable Tax Deduction is Vital to Their Charitable Giving (2011)
Administration Proposals: President Obama has proposed limiting the charitable deduction for high-income earners in several proposals over the past few years.
- 2011 Jobs Plan (ACR coverage)
- Budgets: FY 2013 (ACRresponse), FY 2012 (ACR coverage), FY 2011 (ACR coverage), and FY 2010.
Deficit Reduction: As part of federal deficit reduction talks, following are proposals that have been raised, which include changes to the charitable deduction:
- “Gang of Six” – A Bipartisan Plan to Reduce our Nation’s Deficits Report recommends that Congress “reform, not eliminate” tax expenditures for health, charitable giving, homeownership, and retirement. (July 2011)
- Solutions Initiative - The Peterson Foundation released six deficit reduction plans from the American Enterprise Institute, the Bipartisan Policy Center, the Roosevelt Institute Campus Network, the Center for American Progress, the Economic Policy Institute, and the Heritage Foundation. The six plans addressed all aspects of Federal spending and revenue-raising, including reforming the current tax code.
- The Solutions Initiative (Full Report) (May 2011)
- For our analysis of the plans, click here (June 2011)
- Bipartisan Policy Center: Debt Reduction Task Force – Restoring America’s Future Report recommends a tax credit equal to 15 percent of any donation received, similar to the Gift Aid system in Great Britain. (February 2011)
- The President’s National Commission on Fiscal Responsibility and Reform (“Deficit Commission”) - The Moment of Truth Report proposes recommendations to reduce the deficit that call for massive discretionary spending cuts and eliminating tax incentives, including the charitable deduction. (December 2010)
- Century Foundation, Demos, and the Economic Policy Institute – Investing in America’s Economy: A Budget Blueprint for Economic Recovery and Fiscal Responsibility Report proposes converting the deduction to a refundable credit. (November 2010)
Opinion & Thought
Opinion and thought pieces by experts, scholars, and leaders in the nonprofit sector on the charitable deduction.
- 2/7/12 In Taxes Obama Must Be Clear on Charity, The Hill (Former Congressman Robin Hayes (R-NC))
- 1/28/12 Value of the Federal Charitable Deduction, West Virginia Gazette
- 12/25/11The Grinch who Wants to Steal Charitable Deduction, San Diego Union-Tribune
- 12/18/11 It’s Time to Write Off the Charitable Tax Deduction (Jack Shakely), LA Times
- 11/23/11 Ending Charity Tax Break Will Hurt Poor Most (Stephen L. Carter), Bloomberg Businessweek
- 11/21/11 Deductibility rate for charitable donations must be preserved, DelawareOnline
- 11/21/11 Au Revoir to Noblesse Oblige, The Hill
- 11/14/11 Brent Christopher: A rough winter for charitable giving, The Dallas Morning News
- 10/30/11 Obama’s Plan Could Reduce Amount of Charitable Giving, Seacoast Online (Congressman Frank Guinta, R-NH)
- 10/25/11 Limit Charitable Deductions, and the Poor will Pay, USA Today (Brian Gallagher, United Way)
- 10/25/11 Nonprofits Tell Congress: “Help, or at Least Do No Harm”, Nonprofit Quarterly
- 10/18/11 Nonprofit Leaders: Don’t roll back tax incentives for charitable giving, The Hill
- 10/16/11 Opposing the Proposal to Limit Deductibility of Charitable Gifts, Manteca Bulletin
- 10/12/11 Think Again on Reducing Charitable Deductions for Charities, Center Daily
- 10/11/11 Don’t Punish the Philanthropists, Baltimore Sun
- 10/10/11 Guest Opinion: Don’t reduce value of charitable tax deduction, Billings Gazette (Montana)
- 10/8/11 Charities Pay Dearly in Jobs Plan, Boston Herald
- 10/5/11 A Time to Act on Threats to the Charitable Deduction, Re:Philanthropy (Council on Foundations blog)
- 10/5/11 Don’t Be Charitable About Jobs Bill, Charleston Daily Mail
- 10/5/11 Charity Inc.: Charitable deduction cuts threaten nonprofit work, The Journal Record
- 9/20/11 High-income earners and the charitable deduction, Philanthropy Daily
- 9/15/11 Soak the Rich? No, Soak the Needy, Wall Street Journal
- 9/13/11 Obama stumbles on taxes, Buffalo News
- 7/25/11 Keep the Charitable Deduction, Herald Tribune
- 7/25/11 Encourage Charitable Deductions, Miami Herald
- 7/25/11 Reducing Charitable Deduction is a Bad Idea, Star-Telegram
- 7/23/11 UNITED WAY: Preserve tax deduction for donations, Middletown Press
- 7/15/11 Charitable Tax Deduction Fuels Nonprofits, Boosts Economy, Charlotte Observer
- 7/6/11 Retain Tax Deduction for Charitable Donations, Seattle Times
- 4/13/11 Obama’s war on civil society continues, San Francisco Examiner
- 3/25/11 Congress Tackles Tax Incentives (ACR Consider This)
- 2/17/11 Charitable Deduction Cap is Ill Advised, Huffington Post
- 1/26/11 The Charitable Deduction Must Go, Nonprofit Quarterly
- 1/7/11 The War on the Charitable Deduction, Philanthropy Daily (Opinion)
- 1/7/11 How Private Is ‘Private Charity’?, New York Times
- 7/30/10 Sacrificing “Sacred Cows” (ACR Consider This)
- 7/16/10 A Canary in the Coal Mine – Capping the Charitable Deduction
- Conversation With… Threats to Philanthropic Freedom (Summer 2010), Washington Legal Foundation
- 5/7/10The Charitable Deduction? It’s Not Done with Yet?(ACR Consider This)
- 4/1/10 We Must Encourage, Not Hinder, Charitable Giving, DMA Journal
- 2/7/10 President Revives Call to Set Limits on Charity Write-Offs by the Wealthy, Chronicle of Philanthropy
- 2/1/10 Budget Plan Revives President’s Call for New Charitable-Deduction Limit, Chronicle of Philanthropy
- 10/20/09 Capping Charitable Deductions to Pay for Health Care Is a Bad Idea, Roll Call
- 4/15/09 SIMON: Philanthropy Threatened, Washington Times
- 3/3/2009 Assault on Authentic Compassion, National Review
Other Resources
Links to help you stay informed on proposals and legislation or to contact your representative.
- Information for Policymakers and Staff
- Hearings: Following are scheduled or recent congressional hearings on issues impacting charitable giving.
- Senate Finance Committee “Tax Reform Options: Incentives for Charitable Giving (October 18, 2011)
- Senate Finance Committee “How Do Complexity, Uncertainty and Other Factors Impact Responses to Tax Incentives? (March 30, 2011)
- Quotes - Read what nonprofit leaders, elected officials, and other voices have to say about the charitable deduction.
- Chronicle of Philanthropy - Research, reporting, and views on the charitable deduction.
- State Profiles - State profiles on the economic value and impact of the nonprofit sector compiled by Independet Sector.
- THOMAS (Library of Congress) - Source for federal legislative information including searching for bills, Members of Congress, and legislative committees.
Stay Involved
ACR is engaged in protecting the charitable deduction through a number of ways.
Events:
- 2012 Summit for Leaders & Lobby Day - March 21, 2012
- ACR Fly In/Speak Out: Preserving Charitable Giving (Lobby Day) - October 6, 2011
Following are letters from coalitions of charitable and philanthropic organizations, including the Nonprofit Coalition, to Members of Congress and the Administration:
- 12/15/11 Letter to Chairman Max Baucus (deficit reduction), Nonprofit Coalition
- 11/7/11 Letter to the Super Committee (Committee recommendations), Nonprofit Coalition
- 9/21/11 Letter to the Super Committee (Jobs bill), Nonprofit Coalition
- 9/21/11 Letter to Congress (Jobs bill), United Way
- 7/18/11 Letter to the President & Congressional Leaders (Debit Ceiling/Deficit Reduction Negotiations), Independent Sector (appeared as full-page ad in Politico)
- 7/14/11 Letter to Senator Max Baucus & Congressional Leaders (Debit Ceiling/Deficit Reduction Negotiations), Nonprofit Coalition
- 7/14/11 Letter to members of Congress (Debit Ceiling/Deficit Reduction Negotiations), Grantmakers Forum of New York
- 3/4/11 Letter to the President (FY 2012 Budget), Nonprofit Coalition
- 2/5/10 Letter to the President (FY 2011 Budget), Nonprofit Coalition
- 10/1/09 Letter to Senator Max Baucus (Healthcare Reform), Nonprofit Coalition
- 9/21/09 Letter to Senator Max Baucus (Healthcare Reform), Nonprofit Coalition
Interested in getting involved with efforts to protect the charitable deduction?
Contact William Coughlin (.(JavaScript must be enabled to view this email address)) for more information.
