Through its membership in The Giving Institute (our President + CEO Jeffrey Byrne served as Board Chair for two years) JB+A is a member of the Charitable Giving Coalition. We will continue to carefully monitor the progress of this proposed legislation as it winds its way through the halls of Congress, and will continue to keep you updated. There’s obviously a lot at stake, and we need to stay abreast of these public policy issues.
Consider sharing these updates with your senior executive team, your entire fundraising staff and your Board of Directors. Reach out to your Congressional Representatives and U. S. Senators to let them know of the positive impact the charitable deduction has on philanthropy and your organization. Keeping elected officials informed on the positive impact of legislation within their districts is critical to persuading Congress to pass a permanent version of this proven charitable giving incentive.
As the current Administration and Congress continue to propose various options for tax reform, we know these changes will affect charitable giving and the nonprofit sector. The latest tax reform framework was released last Wednesday, November 1, in H.R. 1, The Tax Cuts and Jobs Act. What are the potential consequences of this proposed legislation on America’s charitable organizations and those they serve?
The Charitable Giving Coalition (CGC), (a group of more than 175 diverse organizations representing private and community foundations, their grantees and independent charities, as well as nonprofit organizations and the associations and umbrella groups) is dedicated to preserving the charitable tax deduction – crucial to ensuring our nation’s charities receive the funds necessary to fulfill their essential philanthropic missions.
The CGC provides a unique and unified voice on Capitol Hill, and recently released a statement outlining its concerns that The Tax Cuts and Jobs Act (H.R. 1) will generate dramatic and negative consequences for America’s nonprofits and their constituents.
This proposed revision to the tax code doubles the standard deduction and shifts millions of taxpayers who currently itemize to taking the standard deduction. As many as 30 million taxpayers who itemized in 2016 would no longer have access to charitable giving incentive and would be taxed on their gifts.
While the CGC is grateful that H.R. 1 retains the charitable tax deduction for those who itemize, it articulates that “the result of this provision alone could be a staggering loss of up to $13.1 billion in contributions annually, undermining America’s charitable organizations and our country’s extraordinary tradition of philanthropy. The charitable deduction would be available to only 5% of all taxpayers – causing this significant drop in contributions. Up to 95% of taxpayers will be taxed on their gifts to charity.”
As an alternative to H.R. 1, the CGC offers a resolution it feels is fair and efficient and will continue to encourage Americans to donate to charities: a universal charitable deduction available to all taxpayers. The CGC believes that continuing to incentivize the deduction for charitable giving would offset anticipated losses and potentially gain an additional $7billion annually for America’s charitable organizations while encouraging younger taxpayers to begin charitable giving earlier.