As political leaders in Washington, D.C., put tax reform and deficit reduction at the top of the legislative agenda, tax incentives that encourage charitable giving in America are threatened like never before.
The Virginia Museum of Fine Arts joined hundreds of nonprofit leaders on December 4-5, 2012 in the nation’s capital to urge lawmakers to protect a 100-year-old American tradition of common-sense tax policies that encourage giving and help support critical programs and services for people in need.
Congress is considering whether to retain, modify, or eliminate the charitable deduction. The potential result, the loss of billions of dollars, would impede the important work that nonprofits do for Virginians who rely on them. The broader influence on Virginia is significant as the Commonwealth’s third largest employer is the non-profit sector with 235,000 paid workers and 130,000 fulltime equivalent workers. The sector also generates $39.2 billion in revenues and $37.9 billion in expenditures.
“Now is not the time to dismantle incentives that support the crucial work of nonprofits in our communities,” VMFA Director Alex Nyerges said. “I would hope Congress and the President will recognize the value of the charitable deduction as a way to support a thriving, independent nonprofit sector that serves millions of Americans in a cost efficient manner.”
The Charitable Giving Coalition, a group of more than 50 nonprofit, charitable and other organizations, brought together hundreds of frontline leaders to Washington, D.C. for “Protect Giving-D.C. Days” in December. David B. Bradley, Director of Government Relations for VMFA, was among the participants who met with those reaching out to federal lawmakers and policymakers to encourage them to keep the charitable deduction intact.
Much of charitable giving is claimed as a deduction by millions of taxpayers each year, meaning they are not subjected to federal income taxes on money they give away to charities. For example, under the current law, if a donor gives $100 to charity, he or she is able to claim $35 of that donation as a tax deduction.
The charitable deduction is a vital and unique incentive to encourage individuals to give away a portion of their income without getting anything in return. Data suggest that for every $1 subject to the charitable deduction, communities reap up to $3 in benefits. It is unlikely government could find a more effective way to leverage private investment in community services.
America’s century-old tradition that encourages giving through charitable donations helps employ millions, improve education and health care, protect the environment, aid the most vulnerable and more. In 2011 alone, individuals gave nearly $300 billion to support charitable causes, according to Giving USA.
Any caps or limits on charitable giving will have a devastating impact on charities and nonprofits. If donors have less incentive to give to charities – donations will decline, impeding the important work nonprofits do for the millions of Americans who rely on them. The fact is that those hit hardest by the economic downturn and unemployment will be hurt the most. And, local, state and federal budgets and nonprofits continue to suffer the consequences of America’s recession – increased demand for services with significantly fewer resources to get the job done. Last year, 85 percent of nonprofits experienced higher demand for their services, according to the Nonprofit Finance Fund. This year is expected to see the same result.
Americans understand the value and impact of the charitable deduction. A new public opinion poll commissioned by the United Way found that most Americans (79 percent) believe reducing or eliminating the charitable tax deduction would have a negative impact on charities and the people they serve. Of those who indicate they would reduce charitable giving, the majority (62 percent) indicate they would have to reduce their contributions by a significant amount – by 25 percent or more. Two out of every three Americans (67 percent) are opposed to reducing the charitable tax deduction.
Representing private and community foundations, their grantees and independent charities, the Charitable Giving Coalition’s members include the Association of Art Museum Directors, American Alliance of Museums, United Way Worldwide, Salvation Army, American Council on Education, the American Institute for Cancer Research, the Association of Fundraising Professionals, Independent Sector, the Council on Foundations, The Philanthropy Roundtable and more.
About the Charitable Giving Coalition
Formed in 2009, the coalition is a broad cross-section of nonprofit organizations across the country, including both the nonprofit organizations themselves and the associations and umbrella groups that serve their needs. The coalition is dedicated to preserving the charitable giving incentive that ensures that our nation's charities receive the funds necessary to fulfill their essential philanthropic missions. The coalition provides a unique and unified voice on Capitol Hill on issues affecting the charitable deduction, a voice composed of both direct lobbying and robust grassroots advocacy.
About the Virginia Museum of Fine Arts
VMFA’s permanent collection encompasses more than 33,000 works of art spanning 5,000 years of world history. Its collections of Art Nouveau and Art Deco, English silver, Fabergé, and the art of South Asia are among the finest in the nation. With acclaimed holdings in American, British Sporting, Impressionist and Post-Impressionist, and Modern and Contemporary art – and additional strengths in African, Ancient, East Asian, and European – VMFA ranks as one of the top comprehensive art museums in the United States. Programs include educational activities and studio classes for all ages, plus fun after-hours events. VMFA’s Statewide Partnership program includes traveling exhibitions, artist and teacher workshops, and lectures across the Commonwealth. VMFA is open 365 days a year and general admission is always free. For additional information, telephone 804-340-1400 or visit www.vmfa.museum.
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