Will Congress Cap Charitable Deductions?

"The non-profit sector hasn't really woken up yet to what this will to do charitable deductions."
-- Former White House budget chief Peter Orszag at an event last Friday

Consider this your wake up call.

Suddenly, opinion leaders across the political spectrum (like Senate Budget Chairman Kent Conrad (D-ND) and the Washington Post Editorial Board) have lined up behind Mitt Romney's proposal for a cap on itemized deductions -- as low as $17,000 for all taxpayers.

The effect on the charitable giving could be devastating. The average taxpayer who itemized in 2010 claimed $22,233 in deductions for mortgage interest and state, local and property taxes alone, and they won't stop paying their taxes and mortgage just because deductions are capped. That leaves little tax incentive for charitable giving and certainly not for gifts on the scale of land or easements. See statistics for your state, a United Way poll showing that 79% of Americans oppose limiting the deduction, and other studies on the impact of reduced tax incentives for charitable giving.

Some in Congress see such a cap as a source for as much as $1.3 trillion in new revenue that could help avert the "fiscal cliff."  We have just weeks to make sure our Senators and Representatives understand its impact on the charities of their districts. With your help, we can demonstrate how incentives for charitable giving strengthen communities and non-profit organizations.

We've partnered to develop five ways you can help: [Click here for updated action items]

• Make this personal for your senators and representative -- National statistics and talking points simply can't match the impact of constituent organizations like yours calling to convey stories about the real impact of a dramatic decline in charitable gifts. You can reach any office by calling: 202-224-3121. The Land Trust Alliance and Independent Sector have both prepared talking points, but the most important points are your hometown stories.
  --> After you make the call, urge your board, supporters, and partner organizations in your community to do the same.
• Send a letter -- Reaching out by phone or in-person is always the most effective way to communicate with your lawmakers, but Independent Sector has also created an easy letter-writing tool. Please take time to customize; this is all about your organization, and its survival is quite literally at risk.
• Sign a group letter -- Add your organization to this group letter by emailing geoffp@independentsector.org. UPDATE: View the final signers, as listed in Politico on December 10.
• Submit an Op-Ed -- Keep the pressure on by teaming up with another charity to submit a joint Op-Ed to the newspaper that covers your region. Explain how a cap on charitable deductions will affect your community. Click here for a sample.
• Come to Washington -- The Charitable Giving Coalition is still seeking participants for their Protect Giving DC Days on December 4-5. They're most interested in participants from the West. Learn more. UPDATE: This event is now full -- make time to meet your legislators when they're home for the weekend.

We will be working with Independent Sector and the Charitable Giving Coalition on this issue, and educating our friends in the Congress and in the Administration. Do let us know what you hear.

We are continuing our year-end sprint for conservation funding and incentives, but in this week of giving thanks, we hope you'll join us in taking a stand for the charitable deduction that sustains us all.

Happy Thanksgiving!

Key Articles Chronicling this Debate

• November 10: Editorial: Limiting tax deductions [Washington Post]
• November 12: Democrats Like a Romney Idea on Income Tax [New York Times]
• November 18: The Uneven Bite of Limiting Deductions [Wall Street Journal]
• November 29: Gene Sperling and Jason Furman: Limiting Tax Deductions -- The Reality of the Math [White House Blog]
• November 30: The reality of tax reform: Less charity, smaller homes, higher state taxes [Washington Post]
• December 2: Fred Hiatt: Paying for charitable giving [Washington Post]
• December 3: A Bipartisan Way to Cap Deductions [Bloomberg Opinion]
• December 4: President Obama Interview on Fiscal Cliff Negotiations [Bloomberg]
  (remarks on charitable deduction at 3:00 minute mark)
• December 4: Charities Lobby Congress to Save their Tax Deduction [The Hill]
• December 5: Senator Tom Coburn (R-OK) interview on charitable deduction [The Hill]
• December 6: Charities Press Congress to Save Tax Deductions [New York Times]
• Chronicle of Philanthropy's Special Section
• Latest News from Independent Sector
  

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