TAMPERING WITH THE CHARITABLE DEDUCTION HURTS COMMUNITIES, NEEDY THE MOST
By John Ashmen
Illinois Business Journal
The region of St. Louis and Southwestern Illinois has a long, proud tradition of charitable giving by corporations and individuals supporting a wide range of vital community services, activities and venues. But nonprofit organizations that rely on generous donors are facing an urgent threat as Congress moves full-steam ahead in its consideration of proposals that could unravel the charitable tax deduction.
A new report issued by Giving USA says those who itemized their charitable contributions comprised more than 80 percent of the total estimate (nearly $229 billion) for giving by individuals in 2012. Other research shows that if lawmakers reduce the value of the deduction, billions in donations would be lost each year, meaning vital services and jobs could be cut or eliminated.
That could be devastating for millions who depend on a network of highly effective, compassionate organizations across the country that provide jobs, economic development, food, shelter and more. For instance, each year, crisis shelters and rehabilitation centers run by members of the Association of Gospel Rescue Missions use private donations to provide approximately:
- 50 million meals.
- 25 million nights of lodging.
- 30 million articles of clothing.
- 20,000 graduates from addiction recovery programs.
Home Sweet Home Ministries in Bloomington served nearly 114,000 meals, gave away more than 4,700, and housed well over 500 men, women and children through shelter services in 2012. More than 1,300 volunteers and 8,200 donors made it possible.This represents just one example. There are thousands more like them.
Catholic Charities USA’s network of local agencies raises nearly $680 million of contributed income annually. Many rely on individual donors for more than half of their contributed income to provide funding to:
Meet the needs of the more than 10 million people seeking help and hope, regardless of race or religious background.
Employ nearly 66,000 and engage more than 311,000 volunteers annually.
The Salvation Army also relies on generous donors to provide food, disaster relief, assistance for the disabled and support for disadvantaged children, the elderly and the homeless. The organization delivers assistance to:
30 million Americans in 5,000 communities with its 70,000 officers and employees and 3.3 million volunteers.
Nearly 60 percent of the $2.8 billion in donations received by The Salvation Army in the United States in 2011 came from individual donors. Some Salvation Army units receive more than 75 percent of their funding from individual donors.
Some 1,200 United Ways throughout America:
- Provide critical services for up to 52 million people.
- Employ more than 9,300 people and help mobilize 2.87 million volunteers each year.
Conservative estimates indicate that limiting the charitable tax deduction could reduce giving by a minimum of 2.5 percent for United Way. That amounts to more than $100 million, or 1.3 million fewer times that United Way could provide job training for an unemployed worker, home care for an elderly citizen, supportive housing for a single mother or a mentor/tutor for an at-risk youth.
These vital organizations are sources of jobs, services and support. They depend on donations that the charitable tax deduction helps make possible. If lawmakers upend it, nonprofits in this region and throughout America lose their ability to provide food and shelter for the most vulnerable, support education and better health, support job creation, innovate and more.
That’s why the Charitable Giving Coalition, a diverse group of more than 60 diverse nonprofits, foundations and other charitable organizations serving communities across the nation, is working to ensure there is a clear understanding of how tampering with the charitable deduction could impact giving and hurt those who need help the most.
It’s important for lawmakers to remember that the nonprofit sector’s role in our communities is not a loophole for the rich. It is a lifeline for those who need it most. With the demand for crucial services on the rise, we must work to find ways to encourage more giving, not less.
John Ashmen is president of the Association of Gospel Rescue Missions, a member of the Charitable Giving Coalition. 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. AGRM is comprised of approximately 275 missions located across North America; Sunshine Ministries Inc .in St. Louis is one of them.