ACR Blog
Events | Federal | Nonprofit Issues
Oct 12, 2012
When the Bull Elephants Fight, the Grass Gets Trampled
Yesterday morning at The Philanthropy Roundtable’s Annual 2012 Meeting, ACR hosted a panel discussion on the relationship between government and the charitable sector, and why now, more than ever, it is important to defend the charitable deduction.
Sandra Swirski, ACR’s executive director, gave an overview of the political landscape heading into the fiscal cliff and the devastating effects it could have on the nonprofit sector. She explained how lawmakers are creating plans to avoid the cliff and fundamentally reform the tax code. Swirski reiterated that as Congress tries to avert the fiscal cliff, the charitable deduction is on the chopping block.
The next panelist Alex Reid, counsel at Morgan Lewis, summarized a few key arguments in defense of the charitable deduction. His presentation focused on how charity accomplishes many important things that government simply cannot. A key argument for preserving the deduction is that the money people give to charity is not consumed - they are giving it away - and therefore, it is not part of the tax base. Reid said if charitable giving is included in the tax base, then it essentially turns the charitable deduction into a subsidy, giving government unprecedented control over civil society.
Cleta Mitchell, a partner at Foley and Lardner, concluded the panel by examining the broader positive effects of the charitable deduction. She built on Reid’s argument that the money donated to charity is not the government’s to begin with, and therefore should not be taxed. Mitchell cited the success of higher education institutions, which greatly rely on private giving, and how well they are doing without government. Overall, she urged the audience to think outside of the box when it comes to how private giving affects civil society and progress in America.
One of the things we can do to help preserve the charitable deduction is come to Washington, D.C. for the Charitable Giving Coalition’s first annual ‘Capitol Hill Fly-In Event’ on December 4th and 5th. This is a great opportunity to meet with Congressmen and their staff to explain the impact that a decline in private giving would have on your programs and the people you serve. Now is the time to remind policymakers about what is at stake should policy changes reduce our nation’s charitable giving.
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