Articles

Only Charitable Deduction Preserved In New Buffet Rule Tax Proposal

2012-02-03T21:14:18Z

By Diane Freda

The charitable contribution deduction is the only deduction that would be allowed under the Buffett rule tax proposed by Sen. Sheldon Whitehouse (D-R.I.), in legislation that would ensure that millionaires pay a minimum effective 30 percent tax rate, charitable sources told Bloomberg BNA Feb. 2.

“The legislation builds on what the president’s blueprint stated, which was that the administration is going to impose the [Buffett rule tax] on individuals with certain high incomes, but is going to hold harmless their contributions to charity,” Sandra Swirski, executive director of the Alliance for Charitable Reform, said.

ACR STATEMENT ON THE CHARITABLE DEDUCTION INCLUSION IN SENATE “BUFFET RULE” PROPOSAL

2012-02-02T15:16:13Z

WASHINGTON, D.C.— In announcing “The Paying the Fair Share Act”, a proposal for a new tax on high earners put forth by 8 Senate Democrats, the charitable deduction was specifically preserved, signaling that incentives for private giving should not be used as a revenue offset for competing priorities.

“ACR believes that our tax code should encourage and incentivize private charitable giving. We appreciate the wide recognition that the charitable deduction is different from all other deductions in that it is an incentive for Americans to give away their money as compared to other deductions and credits. However, ACR also believes that encouraging entrepreneurship and the creation of wealth is vital to sustaining charitable giving and a surtax on high income earners could hinder this goal. We are hopeful Congress and the Administration can come together and create a proposal that accomplishes all of these goals to promote more philanthropy,” said Sue Santa, senior vice president of the Philanthropy Roundtable.

Charitable Deduction Central

2012-01-27T22:12:03Z

NEWS

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.

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

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 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.

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:

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 (william@acreform.com) for more information.

Tax Policy Geeks Take Center Stage—Tax Plans and Reform

2012-01-27T17:00:06Z

Ok, we admit it. We’re geeks. Policy geeks. Tax policy geeks if the truth be told.

Normally when we tell someone our specialty is tax, we get an eye roll, or worse. Unless we are with our tax policy peers, we often feel like the skunk at the garden party.

So imagine our sense of wonder over all of the activity in tax world in the last few months. First, Herman Cain gave us 9-9-9, next…

ACR Newsletter 1.27.12

2012-01-27T16:49:24Z

The latest edition of the ACR newsletter is available below. Here are highlights:

Upcoming Event Summit for Leaders

Washington Roundup:
- State of the Union
- Legislative Activity

Consider This:Tax Policy Geeks Take Center Stage—Tax Plans and Reform

‘Obama Blueprint May Signal Retreat From Limit on Charitable Deductions’

2012-01-27T16:31:59Z

This morning BNA reported that the Administration may be stepping back from previous proposals to cap charitable deductions at 28 percent.

Here’s an excerpt from the article:

“The past three budgets the president has submitted have included a limit to the charitable deduction in every single one of them, through limiting itemized deductions,” said Sandra Swirski, director of Alliance for Charitable Reform. “He’s also raised limiting the charitable deduction as a pay-for in at least two of his bills, one on health care, the other a jobs bill. So it keeps coming up.”

However, Swirski said she is now “cautiously optimistic” that when the president’s budget is revealed Feb. 13, Obama’s “stepping away” from the proposal will be clear….

Read the full article here

ALLIANCE FOR CHARITABLE REFORM STATEMENT ON STATE OF THE UNION ADDRESS

2012-01-25T21:05:42Z

ACR is cautiously optimistic that all the pressure we and others have brought to bear may finally be resonating with the Administration. We believe that our tax code should encourage and incentivize private charitable giving. We appreciate that the President seems to acknowledge the value of charitable giving but we remain cautious and won’t speculate until we see the details of the President’s plan.

Registration Now Open - ACR Summit for Leaders

2012-01-17T17:45:16Z

The Alliance for Charitable Reform (ACR) invites you to the nation’s capital for our third annual ACR Summit for Leaders.

Wednesday, March 21, 2012
8:00 a.m. - 12:00 p.m.
Mayflower Renaissance Hotel
1127 Connecticut Avenue NW
Washington, D.C. 20036

The ACR Summit for Leaders offers a half-day of programming to provide a snapshot of the current political issues impacting philanthropy and nonprofits, and guidance on how to effectively advance your cause in Washington amid competing priorities and constant commotion. The Summit is an excellent opportunity for foundation executives, nonprofit leaders, and others interested in the intersection of public policy and philanthropy.

2012 Congressional Forecast

2012-01-13T15:27:23Z

Well the curtain is up on 2012. What should we expect from Washington this year? The short answer is not much until the bitter end.

The longer answer: If you thought last year was a nightmare on Capitol Hill, this year is likely to be a whole lot worse. With control of the Presidency, Senate and House all up in the air, it is going to be all politics, all the time.

So what can we expect in the short term?

ACR Newsletter 1.13.12

2012-01-13T15:09:25Z

Happy New Year and welcome to 2012! We anticipate a busy year ahead and look forward to keeping you up to date on the issues that matter to our community.

The latest edition of the ACR newsletter is available below. Here are highlights:

Washington Roundup:
- Current State of Play
- What’s Next

Consider This: 2012 Congressional Forecast

Expired and Expiring Charitable Tax Extenders

2012-01-09T22:43:38Z

The staff of the Joint Committee on Taxation has released a listing of federal tax provisions (other than those providing time-limited transition relief after the repeal of an underlying rule) that are currently scheduled to expire in 2011-2022 (with references to the applicable section of the Internal Revenue Code of 1986 or other applicable law).

Southern California Grantmakers Public Policy Conference

2011-12-23T22:00:51Z

Date: February 28, 2012
Location: Los Angeles, CA
Event: Southern California Grantmakers Public Policy Conference

Sue Santa will join Aaron Dorfman, Executive Director, National Committee for Responsive Philanthropy; and Latonya Slack, Senior Program Officer, California Democracy Program, The James Irvine Foundation for a panel discussion of policy issues.

For more details on this event please visit the SCG website: http://www.socalgrantmakers.org/events/upcoming?eventId=401185&EventViewMode=EventDetails

Something You Haven’t Heard About the Super Committee

2011-12-16T16:18:42Z

The late Congressman Mo Udall (D-AZ) once quipped, “Everything has been said but not everyone has said it.” In the case of the Super Committee, we believe that while much has been said, not everything has been said.

ACR Newsletter 12.16.11

2011-12-16T16:17:48Z

The latest edition of the ACR newsletter is available below. Here are highlights:

Washington Roundup:

Payroll Tax
Funding the Government

Consider This:Something You Haven’t Heard About the Super Committee

ACR, NONPROFIT LEADERS SEND LETTER TO SENATE FINANCE COMMITTEE URGING PROTECTION OF GIVING

2011-12-15T21:41:23Z

WASHINGTON, D.C.— A broad coalition of nonprofit leaders sent a letter to the Senate Finance Committee today, reinforcing the importance of protecting the charitable deduction and incentives to give with year-end giving in full swing, the recent failure of the Super Committee, and tax reform inevitably on the horizon.