Nonprofit Leaders Converge on Washington to Defend Charitable Deduction

Concerned that proposals to eliminate or cap the charitable deduction are gaining bipartisan support in negotiations to avoid the so-called fiscal cliff, scores of nonprofit leaders gathered in Washington this week to mount a coordinated lobbying effort, the New York Times reports.

Independent Sector president and CEO Diana Aviv and other nonprofit leaders met with White House officials, including senior advisor Valerie Jarrett, chief of staff Jacob Lew, Gene Sperling of the National Economic Council, and Cecilia Muñoz of the Domestic Policy Council, to express concern that if the negotiations between the White House and House Republicans result in the elimination or curtailment of tax benefits designed to encourage charitable giving, the lost revenue will lead to program cuts that affect millions of people in need. IS estimates that lowering the charitable deduction for high-income households from 35 percent to 28 percent would reduce giving by as much as $7 billion a year, or approximately 2.3 percent, while the Center on Philanthropy at Indiana University estimates that such a move would result in a more moderate 0.4 percent reduction in giving in year one and a 1.3 percent reduction in year two.

"So much of this Washington debate is focused on high-end taxpayers," Steve Taylor, public policy counsel for the United Way Worldwide, told the Times. "From our perspective, that's not what it's about. It's about the people who will have less access to the services our charities provide."

For their part, nonprofit leaders say that little of what they heard in closed-door meetings with policy makers this week allayed their fears that Congress will end up passing legislation that ultimately reduces charitable giving. "If nonprofit leaders don't want changes to the charitable deduction, it is imperative that we get behind the president's call for higher tax rates on the wealthy," argued Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, in a blog post. "The majority of nonprofits know this is true, and I urge the hundreds of nonprofit leaders who have traveled to our nation's capital for visits with members of Congress today to clearly advocate for higher tax rates on the wealthy in addition to their advocacy in opposition to any changes to the charitable deduction."

Annie Lowrey. "In Fine Print of Fiscal Debate, Charities Unite to Defend Deductions." New York Times 12/05/2012. Vicki Needham. "Charities Lobby Congress to Save Their Tax Deduction." The Hill 12/04/2012. Aaron Dorfman. "Nonprofits Must Support Raising Tax Rates on Top Earners." National Committee for Responsive Philanthropy Blog 12/05/2012.