Research Finds Charitable Giving Sensitive to Tax Code

This week a panel discussion held on Capitol Hill highlighted the importance of charitable giving for local communities and the sensitivity of such giving to changes in the tax code. With conversations about broad tax reform gaining momentum in Congress, this timely event featured recent research commissioned by Independent Sector, an advocacy coalition group for a number of philanthropic organizations. That study, conducted by Indiana University’s Lilly Family School of Philanthropy, found that some proposals being floated, including increasing the standard deduction (and therefore discouraging itemizing), could decrease charitable giving by $13.1 billion. The research also suggests religious organizations could feel such a pinch more sharply than secular nonprofits.

John Ashmen, president of the Association of Gospel Rescue Missions, provided a distinctly faith-based perspective on the event’s panel. He explained the powerful presence of shelters and other religious ministries in local communities, and he highlighted how a drop in giving could have real-world impact on how many people such groups can serve. Others on the panel were representatives of the United Way and the League of American Orchestras, as well as a 14-year-old cellist benefiting from a program of the Baltimore Symphony Orchestra.

Notably, the NRB Board of Directors unanimously approved a resolution in 2013 stating:

Suggestions have been made by Members of Congress and by Executive Branch officials that the charitable deduction be minimized or eliminated, and NRB believes that reducing or eliminating the charitable deduction would have a devastating effect on non-profit religious organizations and would destroy some ministries and would negatively impact the good work of other ones that provide free services and great public benefits to their communities and to the nation.

Board Members then called on the federal government not to harm this longstanding successful tax policy, which is 100 years old this year.

More information about the Indiana University study, including figures showing a positive giving effect from expanding the charitable deduction to all tax filers, is available here.

By Aaron Mercer, Vice President of Government Relations

Published: June 30, 2017

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