Congress eyes charitable giving

Excerpted from "Protect giving: A chance for real bipartisanship," commentary by Vikki Spruill in The Hill, September 15, 2014 - Foundations and charities face a pivotal moment. In July, the U.S. House of Representatives passed the America Gives More Act (H.R. 4719) with a bipartisan vote of 277 to 130. Now it needs to pass the Senate. It will give individuals and private foundations the certainty that allows for more charitable giving.

The America Gives More Act makes permanent three important provisions that have been part of the “extenders package” for a number of years. Though they are proven to increase giving and have broad bipartisan support, it’s become the norm for Congress to allow these provisions to expire, then retroactively reinstate them. This inconsistency from Congress leaves donors uncertain of how much they can contribute.

The bill addresses this uncertainty in three key areas:

• Gifts from IRA distributions (referred to as the “IRA charitable rollover”) where generous donors are directing their mandatory distributions directly to charity.
• Gifts of property, specifically conservation easements, which are complicated transactions that can take more than a year to plan and execute.
• Gifts of food inventory, which are often perishable and so demand quick action.

The strong bipartisan alignment around this bill is rare these days in Washington. The vote in the House showed that both Democrats and Republicans understand the importance of supporting charitable giving. Still, this uncommon consensus is at risk of being undermined by Washington gridlock.

Commentary

CMA VP for Government Relations Jonathan Imbody: “In dozens of visits focused on this topic with Congressional leaders and their staff, I have been impressed with a bipartisan, general commitment to charitable giving. Still, the temptation for our deficit-spending Government to tap into new revenue sources is great, and the potential remains for Congress to unwittingly trim giving by fiddling with charity incentives and protections in the tax code.

“Why would Congress take steps that would make fewer Americans able to deduct charitable gifts, or subject givers to stingier limits on how much they give? Don't lawmakers realize that charities provide billions in social services—such as through faith-based medical and dental clinics that care for needy patients—that Government would otherwise have to fund?

“Government always seeks more money, due to the sheer pull of the power derived from money. Many politicians also redistribute our tax dollars to their constituents and pet projects as a means of retaining political power. Years of undisciplined spending now threaten Government's power and politicians' futures, so they are turning to previously sacred sources such as charity for more tax revenue.

“When I visit Members of Congress to persuade them to preserve our charitable gift deductions, I make the following simple points:

1. Government should not tax individuals for giving their money away to help others.
2. Charities can provide services much more efficiently and effectively than Government bureaucracies and save billions that the Government would otherwise have to fund.
3. Any cuts to charitable giving will ultimately penalize the needy individuals served by charities.”

Action
Use our Freedom2Care easy form to let your legislators know that Government should not tax us for money we give away to help others, and that you want your charitable gifts to remain tax-deductible.

Resources
Fact sheet on charitable giving
Itemized Deductions State-by-State - Pew Charitable Trusts

CMA lobbies to protect your charity gift tax deduction

Excerpted from "Top senators lobby for charitable deduction," published in The Hill, November 20, 2013 - Two senior tax writers are lobbying to ensure that the charitable deduction remains intact in any tax overhaul. Sens. John Thune (R-S.D.) and Ron Wyden (D-Ore.) say in a new letter that deduction's full value should be kept, to reiterate the government's "long-standing dedication to encouraging private acts of charity and compassion."

"The charitable deduction is unique. It is the only provision that encourages taxpayers to give away a portion of their income for the benefit of others," Thune and Wyden wrote to Senate Finance Committee Chairman Max Baucus (D-Mont.) and the panel's ranking member, Sen. Orrin Hatch (R-Utah).

"For this reason, it is not a loophole, but a lifeline for millions of Americans in need."

Charitable groups have long made a similar argument for leaving the deduction alone in tax reform or deficit reduction efforts. Scrapping the tax break, those groups say, would put a dent in their services, putting more strain on state and local governments that would be forced to make up the difference. President Obama has long called for capping itemized deductions at 28 percent, instead of the top individual rate, currently 39.6 percent.

Commentary

CMA VP for Govt. Relations Jonathan Imbody– “I met with Senators Thune and Wyden some weeks ago to discuss strategies to protect your charitable gift tax deduction and also the idea of sending this letter. Along with colleagues in the non-profit sector, I have been lobbying many lawmakers to help them recognize that the government should not tax you for money you give away to help others.

“Politicians taking aim at eliminating or limiting the charity gift deduction are playing with political fire. Two out of every three Americans (67 percent) oppose reducing or eliminating the charitable tax deduction.ⁱ Some other reasons to keep the charity deduction:

• Any weakening of tax deductions—whether capping the amount you can give or eliminating the deduction if you only give a certain amount—ultimately hurts the people helped by charitable organizations. Experts estimate that changing the charity tax deduction will decrease giving by up to $78 billion.ⁱⁱ
• Cutting charity is not a revenue generator for the government. Any drop-off in charitable giving caused by tinkering with the deduction means the government will have to begin paying for the social services no longer provided by charities.
• One in 10 Americans works for a non-profit, so cutting charity means threatening up to 13.5 million jobs.ⁱⁱⁱ

“I hope you will take a moment to click on this link and use our easy form to send a pre-written note to your legislators, urging them to protect charity by preserving the charitable gift tax deduction. Thank you.”

ⁱUnited Way Worldwide survey, Nov. 29, 2012. http://www.unitedway.org/press/release/americans-agree-charitable-tax-deduction-vital-to-nonprofits/
ⁱⁱ"Should We End the Tax Deduction for Charitable Donations?" Wall Street Journal, Dec. 14, 2012. http://online.wsj.com/article/SB10001424127887324469304578143351470610998.html
ⁱⁱⁱ "Protecting America’s Strong Tradition of Giving," Charitable Giving Coalition website. http://protectgiving.org/about/charitable-giving-coalition/

Resources

Tax reform drive threatens deductions and charity
CMA lobbies senators to protect charitable gift tax deduction

Action
Use our Freedom2Care pre-written message to tell your legislators to preserve the charity tax deduction.