As a Member Firm of the Giving Institute, EHL Consulting has just received and is providing you with important new information about possible changes in the tax code and their potentially significant impact upon charitable giving.
The Giving Institute has forwarded us a Letter Template to send to Elected Officials, which we have included for you below. They recommend that anyone concerned about the possibility of changes to the charitable deduction should contact their U.S. Senators and members of Congress.
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[INSERT LETTERHEAD/LOGO]
[DATE]
[NAME]
[ADDRESS]
Dear [INSERT NAME]:
As Congress takes up tax reform, deficit reduction and the fiscal cliff, we urge you not to impose any limits or caps to the charitable deduction. As a supporter of the Charitable Giving Coalition, a national group representing a broad cross-section of organizations, we are working to make sure members of Congress understand what impact a proposed reduction to the charitable deduction would have on those we serve.
America’s economic recovery requires a strong philanthropic sector, whose role as a safety net and innovator is more important than ever for a faster, sustainable economic recovery. This is particularly true as 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.
Now is not the time to dismantle incentives to support the crucial work of the nonprofit sector – developing medications, improving education and health, protecting the environment, creating jobs, enhancing arts and culture.
Nonprofits and charitable organizations supported through the generosity of millions of Americans have been crucial during times of crisis, particularly in the wake of natural disasters like Hurricane Sandy. As you can imagine, any cap or limitation on charitable deductions undermines charitable giving and would have long-lasting negative consequences.
Nonprofits generate $1.1 trillion every year in the form of jobs and services. One in 10 Americans work for a nonprofit, providing 13.5 million jobs, or approximately 10 percent of the country’s workforce.Employees of nonprofit organizations received roughly 9 percent of wages paid in the U.S. in 2009,and the nonprofit sector paid $668 billion in wages and benefits to its employees.
For example, [INSERT LOCAL STORY THAT DEMONSTRATES THE VALUE AND IMPACT THAT LOCAL NONPROFITS – SUPPORTED THROUGH CHARITABLE GIVING – ARE HAVING IN YOUR COMMUNITY – NEED BEING ADDRESSED, HOW THE PROGRAM WORKS, HOW MANY PEOPLE HAVE BEEN SERVED, CHANGE OR RESULT ACHIEVED.]
The charitable deduction is different than other itemized deductions in that it encourages individuals to give away a portion of their income to those in need. It rewards a selfless act, and it encourages taxpayers to give more funds to charities than they would otherwise have given.
Data suggests that for every dollar a donor gets in tax relief for his or her donation, the public typically receives three dollars of benefit. No other tax provision generates that kind of positive public impact.
In 2011, individuals gave nearly $300 billion to support charitable causes, according to Giving USA. Much of that giving is claimed as a charitable deduction by millions of taxpayers each year, meaning they are not subjected to federal income taxes on money they give away to charities.
People give to worthwhile causes for many reasons—incentives such as tax deductions being among them. Tax incentives make more and larger gifts possible, and they do have an impact on donors.
A recent 2012 study found that thirty-three percent of donors surveyed would reduce their giving if the charitable deduction did not exist. A survey conducted earlier this year showed three out of four Americans say they do not favor cutting, capping or limiting the charitable tax deduction.
We urge you to maintain the current charitable deduction to promote a vibrant charitable sector and the benefits the sector provides to the economy and the American public. America’s strong philanthropic tradition should not be dismantled by imposing limits on a 100-year tradition that encourages giving through charitable donations. That’s why the Charitable Giving Coalition is speaking out to protect the charitable deduction.
We welcome the opportunity to meet with you and your staff to discuss the unique value of the charitable deduction. We look forward to continuing to work with you to strengthen the impact of nonprofits in communities throughout America and the millions of people who depend on their programs and services.
Sincerely,
[YOUR NAME]