Foundations, Nonprofits Opt Out of Estate Tax Debate

Many university, foundation, and nonprofit executives are keeping their opposition to President Bush's plan to repeal the estate tax quiet so as not to offend donors and board members who may support repeal of the tax.

"Part of the problem is that all charities are trying to learn what the implications would be, but they may not step up to the plate in time," said Gary Bass, executive director of OMB Watch, a nonprofit advocacy organization opposed to repeal of the tax. "It would be enormously ironic if institutions like colleges and universities didn't advocate more strongly against repealing the estate tax."

Related Links
•  "Charity for All" (The Nation)
•  "Myths About Estate Tax Repeal" (Washington Post)
•  Join the discussion

Although repeal advocates argue that abolition of the tax will increase charitable giving, studies by a number of nonprofit research groups show that elimination of the tax could cut annual gifts to institutions such as schools and hospitals by anywhere from 12 percent to 45 percent.

The National Committee on Planned Giving, a professional association for people whose work includes developing, marketing, and administering charitable planned gifts, recently urged the sector to stay out of the estate tax debate even though a repeal would "produce catastrophic consequences...by crippling the charitable sector."

Some observers believe the committee's stance was informed by a speech made by Sen. Jon Kyle (R-AZ), in which the Arizona republican put organizations against repeal of the tax on notice by threatening to call "every member of that person's board of directors and say: Do you know what your hired person is lobbying for back here? They are lobbying to pay 55 percent of the estate tax to the U.S. government because it might be an incentive to contribute more to their charity. I think these folks will turn tail and go home."

David Abel. "Nonprofits Differ with Donors on Estate Tax Repeal" San Francisco Chronicle 03/13/2001.