(Jen Klaassens is vice president of programs at the Wasie Foundation, which supports scholarship programs for students of Polish ancestry at colleges and universities in Minnesota and make grants to nonprofit charitable organizations in a number of areas.)
Congress is threatening to eliminate the charitable deduction as we know it -- at the expense of millions of people in need. Specifically, lawmakers on both sides of the aisle are talking about imposing a cap or limit on the value of the charitable tax deduction as part of a bigger effort to raise additional revenue and/or "simplify" the tax code.
The charitable deduction is a unique element of the federal tax code that encourages Americans to selflessly invest in their communities. Capping or limiting the deduction is not the solution to current budget concerns.
Philanthropy spurs innovation, aids the most vulnerable, provides relief in crises, supports education and health, advances cures and scientific breakthroughs, enhances the arts, and makes investments that fuel economic growth. For every $1 a donor receives in tax relief, communities garner as much as $3 in benefits. It is highly unlikely government could find a more effective way to leverage private investment in vital community services.
The charitable deduction works. It encourages Americans to give a portion of their income to charitable causes without getting anything back, benefiting communities across the country as well as the larger economy. In many cases, donors also experience a sense of well-being from helping. Limiting or capping the deduction will reduce charitable giving, which will hurt Americans most in need. Nonprofits already struggling to balance increased demands for services with reduced income need more support, not less.
The Wasie Foundation, part of the Foundations on the Hill Florida delegation, is actively reaching out to members of Congress and encouraging them to preserve the charitable deduction so as to ensure a thriving charitable sector that has adequate resources to address needs in our communities and invest in the mounting challenges confronting society. Foundations on the Hill consists of thousands of grantmaking foundations that have come together around a single message: there is an inextricable link between thriving communities and charitable giving.
Here are a few statistics: nonprofit organizations put $1.1 trillion into the economy every year in the form of human services; 1 in 10 Americans work for a nonprofit, and the sector accounts for 13.7 million jobs; and a significant majority of Americans (67 percent) are opposed to capping or limiting the charitable deductions, while 62 percent say they would likely reduce their charitable giving by a significant amount (25 percent or more) if the deduction is capped or limited.
The message is clear: Americans want to protect the charitable deduction. We urge Congress to maintain the deduction in its current form and protect the critical role philanthropy plays in strengthening our economy and communities.
-- Jen Klaassens