ACR NEWSLETTER

ACR, Nonprofit Leaders Send Letter to Senate Finance Committee Urging Potection of Giving

Letter Reinforces Economic Importance of Incentives to Give and the Nonprofit Sector

For Immediate Release
December 15, 2011

Contact: Alison Hawkins
.(JavaScript must be enabled to view this email address)
(202) 822-8333

ALLIANCE FOR CHARITABLE REFORM, NONPROFIT LEADERS SEND LETTER TO SENATE FINANCE COMMITTEE URGING PROTECTION OF GIVING
Letter Reinforces Economic Importance of Incentives to Give and the Nonprofit Sector

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. 

The Alliance for Charitable Reform (ACR) joined onto the letter with 23 other nonprofit organizations that represent both charitable donors and the charitable service providers.  The message to lawmakers emphasized that proposed changes to the itemized deduction would adversely impact the ability of charities nationwide to raise the “the necessary resources to provide critical philanthropic services that ensure shelters for the homeless, food for the needy, healthcare services for those who lack access, programs that improve civic and cultural vitality and other necessary endeavors.”  The Senate Finance Committee and Chairman Max Baucus (D-MT) will play a pivotal role in potential tax reform and deficit reduction, where changes to incentives to give could occur.

“At this time of year, it is easy to see the impact and value of giving. It can mean having the next meal or a place to sleep for many in need. Decreasing incentives to give will a direct hit to those people the most,” said Sue Santa, senior vice president of the Philanthropy Roundtable.  ACR is a project of the Philanthropy Roundtable and is comprised of nonprofits leaders and groups that serve as a leading voice on opposing legislative or regulatory proposals that could diminish private giving.

An excerpt from the letter said, “Charities leverage charitable contributions to bridge the gap by serving those in need and our communities as budgetary constraints hinder state and federal governments from providing similar services. These charity-provided services are critical, and reducing charitable giving does not just harm the nonprofit sector, it also hurts those in the lowest income brackets who rely heavily upon charitable services. If the charitable deduction is capped, reduced or eliminated, wealthy Americans will not bear the brunt of any changes made to itemized deductions that negatively impact charitable giving—America’s poor will.”

The full text of the letter is pasted below. You can also find the letter at: http://acreform.com/article/coalition_letter_Dec_2011/

For more information about ACR or this letter contact Alison Hawkins at .(JavaScript must be enabled to view this email address) or at 202-822-8333.

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December 15, 2011
The Honorable Max Baucus
United States Senate
511 Hart Senate Office Building
Washington, DC 20510-2602
Dear Chairman Baucus:

As 2011 comes to a close, Americans begin to increase their philanthropic activities in conjunction with the holiday season. In turn, charities across the country are undertaking yearend fundraising campaigns to ensure that they have the necessary resources to provide critical philanthropic services that ensure shelters for the homeless, food for the needy, healthcare services for those who lack access, programs that improve civic and cultural vitality and other necessary endeavors. These campaigns rely heavily upon charitable contributions from individuals, many of whom receive a tax deduction for those contributions. For this reason, as a
coalition representing a broad cross-section of nonprofit organizations across the country, we urge you to continue to preserve the charitable deduction during future discussions associated with deficit reduction, expiring tax cuts and other related tax measures.

The charitable deduction is different than other tax provisions in that it encourages individuals to give away a portion of their income to those in need. It rewards a selfless act, and it encourages taxpayers to give more funds to charities than they would otherwise have given. Data suggests that for every dollar a donor gets in tax relief for his or her donation, the public typically receives three dollars of benefit. No other tax provision generates that kind of positive public impact.

The vast majority of donors give their charitable contributions at the end of the year prior to the December 31 cutoff, which indicates that the tax implications of their gifts do affect donors. Because of this consistent trend in donor giving, many charities rely heavily upon year-end giving campaigns and keep their offices open through the holidays, sometimes right up until midnight on December 31, to ensure that they receive and process last minute charitable contributions prior to the tax deadline. Furthermore, accountants and financial planners consistently give year-end tax advice regarding charitable donations to the taxpayers that they serve. Although the charitable deduction is not the only reason why donors give, the deduction does ensure that donors give more often and give larger gifts.

It is worth noting that high-income earners are more sensitive to changes in tax incentives. Perhaps more importantly, higher income taxpayers account for the majority of individual giving. According to the recent CBO report on the tax treatment of charitable giving, tax filers who reported AGI of at least $100,000 in 2008 were responsible for well over half (about 58 percent) of all charitable giving by taxpayers.

Charities leverage charitable contributions to bridge the gap by serving those in need and our communities as budgetary constraints hinder state and federal governments from providing similar services. These charity-provided services are critical, and reducing charitable giving does not just harm the nonprofit sector, it also hurts those in the lowest income brackets who rely heavily upon charitable services. If the charitable deduction is capped, reduced or eliminated, wealthy Americans will not bear the brunt of any changes made to itemized deductions that negatively impact charitable giving—America’s poor will.

Also, do not underestimate the positive impact that charities have on the economy. In 2009, nonprofits employed 13.5 million individuals, or approximately 10 percent of the country’s workforce. More people work in the nonprofit sector than in the finance industry, including insurance and real estate. Employees of nonprofit organizations accounted for 9 percent of wages paid in the U.S. in 2009, and the nonprofit sector paid $668 billion in wages and benefits to its employees. The fact remains that the charitable sector represents a significant cog that drives economic recovery.

For these reasons, we need to encourage all individuals, regardless of income and wealth, to give more to charitable organizations, not less. Again, we urge you to oppose any future efforts to reduce or cap the value of itemized deductions for charitable contributions. We look forward to working with you and your staff on this issue and on any other issues affecting the charitable sector.

Sincerely,

Neal Denton
Senior Vice President
Government Relations and
Strategic Partnerships
American Red Cross

John Ashmen
President and CEO
Association of Gospel Rescue Missions

Steven S. Taylor
Vice President & Counsel for Public Policy
United Way World Wide

Adam Meyerson
President
The Philanthropy Roundtable

Jeffrey Clarke
Interim President and CEO
Council on Foundations

Diana Aviv
President and CEO
Independent Sector

Dan Busby
President
Evangelical Council for Financial Accountability

William C. McGinly, Ph.D., CAE
President, Chief Executive Officer
Association for Healthcare Philanthropy

John Lippincott
President
Council for Advancement and Support of Education

John H. Graham IV, CAE
President and CEO
American Society of Association
Executives

Andrew Watt
President & CEO
Association of Fundraising Professionals

William C. Daroff
Vice President for Public Policy & Director of the Washington Office
Jewish Federations of North America

Mike Novak
President and CEO
Education Media Foundation

Jesse Rosen
President and CEO
League of American Orchestras

Senny Boone, Esq.
SVP, Corporate and Social Responsibility
DMA & DMA Nonprofit Federation

Tanya Howe Johnson
President and CEO
Partnership for Philanthropic Planning

Sr. Georgette Lehmuth, OSF
President and CEO
National Catholic Development Conference

Sandra Swirski
Executive Director
Alliance for Charitable Reform

Rick Dunham
President and CEO
Dunham+Company

Kelly Browning
Executive Vice President & Chief Operating Officer
American Institute for Cancer Research

Ford W. Bell
President
American Association of Museums

Anthony W. Conway
Executive Director
Alliance of Nonprofit Mailers

Robert S. Tigner
General Counsel
Association of Direct Response Fundraising Counsel

Marc E. Chardon
President and Chief Executive Officer
Blackbaud

cc: Members of the Joint Select Committee on Deficit Reduction