• July 24, 2014

Prominent Nonprofit Coalition Supports Obama’s Tax Plan

Diana Aviv

Richard White/Chronicle of Philanthropy

Independent Sector chief executive Diana Aviv

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Richard White/Chronicle of Philanthropy

Independent Sector chief executive Diana Aviv

A week after saying it wanted to avoid wading into the “middle of a partisan political struggle” on any specific tax proposal, Independent Sector, the coalition of charities and foundations, on Wednesday stated its support for President Obama’s plan to raise rates on the wealthy.

“We believe a plan that includes a modest tax increase on the 2 percent of Americans who can most afford it offers the best hope of moving forward in a fair and balanced way,” it said in a statement.

The statement follows a meeting last week at which senior White House officials asked a dozen leaders from nonprofit and higher education associations to publicly declare support for the president’s plan to increase tax rates for the highest earners.

Senior Obama administration officials also asked those leaders to temper their advocacy against the president’s proposal to limit the tax break that wealthy donors can get for charitable gifts.

Obama administration officials also delivered their message in two conference calls last week with other nonprofits and foundations and asked charity and university leaders to write op-eds and issue public statements supporting the president.

Some Republicans said the White House was using “bullying tactics” to secure the support of charities.

Independent Sector’s first statement reiterated its yearlong stance that any deficit-reduction plan should include fair revenue increases—shouldered “by those who can afford to contribute more”—and spending cuts.

It then restated its insistence that the charitable deduction should be preserved during negotiations between the White House and Congress to avoid the “fiscal cliff,” the deep spending cuts and tax hikes that are scheduled to take place in January.

“We strongly believe the charitable deduction has no place in discussions about the fiscal cliff,” it said last week. “And we are not interested in getting in the middle of a partisan political struggle.”

But on Tuesday the association’s board voted unanimously to issue a new statement that supports the president’s call to raise tax rates on the top 2 percent of taxpayers, a plan that Republicans have so far refused to accept.

Diana Aviv, Independent Sector’s chief executive, said the new statement was not a response to the White House, and denied feeling bullied. “Bully implies that we are weak and that they are the strong ones and that they can force us into a position we don’t want to be in,” she said.

The board decided it needed to be more specific because the debate is raging now and it “wanted to be clear,” she said.

That decision relieved some who have been calling on leading nonprofit associations to advocate more for higher taxes than for preserving the deduction.

Gary Bass, executive director of the Bauman Foundation, welcomed Independent Sector’s “balanced approach,” saying it “helps fill a zone of silence from charities.”

“Without added tax revenue, nonprofits across the country will face massive budget cuts,” he said in a statement. “Even those not dependent on government funding will face increased demand and cost as government funding is reduced for organizations that receive government funding. Charities would be wise in advocating for a fair approach that increases the tax on the wealthiest families while protecting programs that serve the most vulnerable among us.”

Other organizations, however, maintained neutrality on the subject.

The Alliance for Charitable Reform, an advocacy group set up by the Philanthropy Roundtable, has no plans to amend a statement it issued last week saying it would not take a position supporting President Obama’s tax proposal and that charities “should not be forced to enter this political wrangling.”

Leadership 18, an alliance of chief executives of some of the largest charities, nonprofits, and religious groups, says it is also remaining focused solely on the charitable deduction, even though many of its members also belong to Independent Sector.

“This is a very diverse sector, so organizations are expected to take positions that are consistent with their own priorities,” Gloria Johnson-Cusack, the group’s executive director, said. “Those aren’t all going to be the same.”

President Obama has proposed limiting the tax break that households earning more than $250,000 can get for their charitable gifts to 28 percent—down from the current maximum of 35 percent. Instead of receiving a tax break of 35 cents on every $1 gift they give to charity, they would get 28 cents.

Fr. Larry Snyder, president of Catholic Charities USA, an Independent Sector board member who attended the White House meeting last week, backs the decision to support the president’s proposal, a spokeswoman said.

Steve Taylor, senior vice president for public policy at United Way Worldwide, said his group had a “robust discussion” about the president’s request, but does not support Independent Sector’s position.

His group, an Independent Sector member, wants to keep its focus on preserving the deduction. Any limits to the benefit, he and others have warned, could result in a significant decline in donations.

“We have tried to navigate through this, to figure out what the policy issues are and what the political issues are,” Mr. Taylor said during an Independent Sector conference call on Wednesday. “We’re trying to avoid the political side.”

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