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Don’t Throw Charities Off the Fiscal Cliff

December 21, 2012 | Land Trust Alliance | Washington, D.C.

There have been heated discussions in the news about cutting the tax deductions you take for giving to charities.  Assertions I’m hearing about who benefits from the charitable tax deduction are short-sighted.  

No one is better off financially after making a charitable gift. While a donor may get some reduction in taxes, their gift to benefit others is vastly larger than the tax deduction. Plus, charities have a multiplier effect on donations: every dollar that the tax deduction costs the government generates more than $4 in charitable programs.

Through the charitable deduction, Americans are provided an incentive to support a wide range of charities working to solve problems in communities across the country, contributing immeasurably to the health and welfare of our country.  At a time when government resources are shrinking, it makes no sense to discourage people from giving to charities when they need it the most.  

Tax benefits for charitable contributions started in 1919 and has persisted through any number of major tax reforms.  Hundreds of thousands of charitable enterprises of all sorts – from the Red Cross to Feeding America to Opera America – have built their business models around it, and they have asked for our help in defending it.  I think defending tax benefits for charitable contributions is a good idea.

Senator Orrin Hatch (R-UT) was right when he said “Charities today face the prospect of enduring another recession that will again put downward pressure on charitable giving. This is not the time to reduce the charitable deduction and further suppress the incentive to give.”  

The Land Trust Alliance represents 1,700 land conservation groups that work with willing land owners to protect our natural heritage and provide benefits of clean water and air, fresh, local food and healthy places to live and work.  

We can certainly argue about the merits of various attempts to wrangle more out of the tax code for conservation (there have been lots of those).  But on the current issue of capping deductions on charitable giving now in front of policymakers, I see only negative effects and little or no interest amongst policymakers in finding an appropriate way to mitigate those or create a useful alternative.

All Americans should support greater fiscal responsibility for the federal government, and we are already seeing real consequences of irresponsibility in the form of cuts in spending – including spending for conservation in a host of government programs (including LWCF, NAWCA, FRPP, WRP and NFWF). This despite the fact that real spending on conservation programs is not a driver of our fiscal problems, having only increased 2% over the last 30 years in real dollars.  We can’t put ourselves above the need for a solution – but we need to speak up so that policymakers understand what is at stake.  

Any limits to the charitable deduction would hurt America’s charities by directing resources away from them and the millions of people they serve. As Congress and the White House look for a way to back off the fiscal cliff, they need to find a way to keep charities in the U.S. from going over one themselves.

Rand Wentworth
President, Land Trust Alliance
202-841-0886 | rwentworth@lta.org

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