A cap on charitable deductions could lower annual giving by $7 billion
Make your voice heard and support your Ohio charity for veterans.
$25 billion. That’s the amount that charitable giving has declined since the economic downturn in 2008. Americans have struggled to cope with a volatile economy while state and federal funding have declined, making the role of charitable contributions more critical than ever.
However, the government’s proposed cap on the value of the charitable deduction for certain taxpayers is projected to cost America’s charities and those they serve as much as $7 billion a year.
“According to Giving USA, in 2011, donations to charities were nearly $300 billion, with more than $200 billion coming from individuals,” National Volunteers of America president and CEO Mike King testified before the House Ways and Means committee. “Studies have shown that tax policy greatly shapes the size and number of charitable donations. It has been estimated that, with no deduction for charitable gifts, annual giving would drop by between 25 percent and 36 percent.”
He went on to say that unlike other deductions, which subsidize personal spending that benefits the individual taxpayer, the charitable deduction actually encourages taxpayers to give up income in order to benefit their communities.
The charitable deduction is also an efficient way for the government to spur investment in communities. “When an individual in the highest tax bracket donates $1,000 to charity, the government forgoes $350 in tax revenue, but communities benefit from the entire $1,000 gift,” King said. “The government is unlikely to find another vehicle that can leverage private spending for community services on a nearly 3-to-1 ratio.”
A report by Congress’s Joint Committee on Taxation noted that an important role of the charitable deduction is to stimulate donations. “Many charitable organizations rely on charitable donations to finance their operations, and the charitable contribution deduction plays an important role in providing such support,” the report stated. “The deduction for charitable contributions reduces the economic cost of making a donation and thus encourages charitable giving.”
Defend the charitable deduction – while making it work for you.
While more and more troops return to the states without a job or even a home, the time is critical to protect and encourage giving to nonprofit organizations. As King testified, “While our nation faces a fiscal crisis that must be addressed, Congress should stop seeing the charitable deduction as an easy mark and acknowledge the fiscal cliff they will create for America’s most vulnerable at a time they can least afford it.”
Giving strengthens our communities. Consider making a difference:
Take advantage of the charitable deduction by donating your vehicle to Volunteers of America of Greater Ohio in cities like Cleveland, Columbus, Dayton, Toledo and Cincinnati. All you need to do is fill out this short online auto donation form or call (800) 862-6030. The Volunteers of America staff will then arrange a time and place at your convenience for your free same-day towing for your car, truck, motorcycle, boat or RV on the market.
If you have any questions, please visit our Donate Your Car FAQ or give us a call today.