The work accomplished by local, national, and international charitable and non-profit organizations has a tremendous impact in our world. These organizations – effectively, efficiently, and with conviction – offer vital human services that governments are unable or unwilling to provide. Through their efforts, countless lives and communities across the globe are re-imagined and improved. 

The current economic climate has compelled unprecedented reductions in local, state, and federal programs and funding designed to serve the most vulnerable members of our society. This is forcing the non-profit and charitable agencies that serve these populations to shoulder an even greater burden. The work of providers in every sector – health, education, research, social services, faith congregations, and more – is being impacted. 

In the coming months, you will be hearing many proposed solutions to the nation’s debt and budget crisis. One idea that is surfacing is a proposal to restrict or eliminate the income tax deduction for charitable donations. This would be a mistake with swift and negative impact for non-profit and charitable organizations who depend upon philanthropic donations, large and small, to fulfill their mission. 

According to information compiled by the National Center for Charitable Statistics (NCCS), the nation’s nearly 1.6 million non-profit and charitable organizations depend on the more than $290 billion donated by individuals, foundations, and corporations to provide 22% of the revenue they need to operate and serve their constituencies. This is not the time – when non-profits and charities need increased and sustained private support – to remove a powerful incentive for people of all income levels to give generously. 

In 2009, these non-profit and charitable organizations also paid 9% of all salaries and wages in the United States and their share of our nation’s Gross Domestic Product was 5.4%. In many states, non-profits are the largest employers. Including a provision in a “jobs” bill that is certain to eliminate jobs in the non-profit sector is both counterintuitive and destructive. Non-profits would be forced to choose between cutting jobs or services – an impossible decision to make at a time when both are critically needed. 

It is a misguided symbolic gesture to eliminate or further restrict the longstanding charitable deduction by characterizing it as a “tax break for the rich.”  This unfairly impacts taxpayers who generously and intentionally give to organizations and causes that reflect their deepest values. 

But the elimination of the charitable deduction goes far beyond the perceived self-interest of some taxpayers. It speaks to a more fundamental American value – the idea that it is in the government’s interest to help non-profit and charitable organizations do the work it cannot do. These organizations form vast safety nets that strengthen our communities and preserve our nation’s highest ideals about the dignity and worth of every human being. 

Our nation is best served when its leaders and policies promote voluntary philanthropy – rather than taxes – thus strengthening the foundational American values of individual responsibility, grass-roots involvement, and collaborative partnerships that build community and advance justice. There also is an emerging movement of social entrepreneurism that must be cultivated and celebrated – not only for its altruistic outcomes, but for the new investment and employment opportunities it offers. 

The mission of our company is to activate personal wealth for social impact.  We work with individuals, families, and small business owners to help them realize a secure life for themselves, plan a thoughtful family legacy, and create lasting significance through philanthropic giving. In our experience, people are not driven to generosity by the promise of tax savings. But knowing that they can have a greater impact with their philanthropic giving because of the tax benefits often motivates them to do more than they thought possible. 

We respectfully urge you to reject any proposed changes to the U.S. Tax Code that would eliminate or further restrict the charitable deduction. By doing so, you will demonstrate your support for the mission and work of thousands of non-profit and charitable organizations that diligently and ably serve the critical needs of people throughout our nation and around the globe. 

Sincerely,

Ron Ware, J.D.

President and CEO

Wealth Impact Partners