Uncharitable Charities?

On Christmas Day, the Wall Street Journal Editorial Board posted a piece titled “The Uncharitable Charities: The philanthropy lobby wins big but still trashes tax reform.” Highlighting the retention of the itemized charitable deduction in the major tax reform law recently signed by President Donald Trump, a move the editorial board called “an economic mistake,” the article specifically rebukes comments made by Dan Cardinali, president of Independent Sector, that “the tax code is now poised to de-incentivize the heart of civic action in America.”

NRB has a very different view from the WSJ Editorial Board of the immense value of the century-old success story that is the charitable deduction (see a relevant NRB Board of Directors resolution here). There are indeed concerns worthy of further constructive consideration regarding the new law’s possible effects on charitable giving – concerns that were elevated in prominence with Sen. James Lankford’s (R-Okla.) and Rep. Mark Walker’s (R-N.C.) introduction of the Universal Charitable Giving Act last year.  Unfortunately, the current rhetoric of Independent Sector and some of its allies may be counterproductive to such an ongoing conversation.

For example, top leaders at the National Council of Nonprofits this week called the new tax reform law a “destructive tsunami” that would lead in essence to a “new tax on philanthropy.” They claimed not to be writing hyperbolically, but the text seems to read otherwise. Remarkably, the first key issue they focused their ire on was one that actually did not make it into the final bill: curtailment of the infamous Johnson Amendment.  They dismissed with scare quotes the reasoning behind the thoughtfully crafted language of the Free Speech Fairness Act – notably, a bill also championed by Lankford in the Senate. In fact, they found the effort to carefully address the First Amendment chill of the Johnson Amendment so offensive that they accused by name President Trump, Vice President Pence, and, among others, NRB as simply being motivated by a “lust for profit and power.”

Such baseless and counterproductive disparagement aside, there are no doubt possible opportunities and challenges of the new law to consider. One discussion that promises to be more civil and balanced will be hosted online next Thursday by the ECFA. Find out more here.

By Aaron Mercer, Vice President of Government Relations

Published: January 5, 2018

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