Congress Offers Tax Break to Help Tsunami-Relief Charities

By Elizabeth Schwinn

The House and Senate today unanimously passed a bill designed to encourage Americans to continue making donations that will help victims of the deadly earthquake and tsunamis in South Asia.

The legislation, which President Bush is expected to sign, would allow donors who itemize on their taxes to receive a tax deduction on their 2004 taxes if they make a cash gift by the end of this month to a charity that is subsidizing disaster-relief efforts. Under current law, taxpayers would have to wait until they filed their 2005 taxes to claim a deduction for any charitable gift they made after December 31, 2004.

Among groups that supported the legislation is Catholic Relief Services, which says that donors usually give heavily at the end of the year in order to take a tax deduction the following year.

"By extending the 2004 deadline to January 31, we expect that many donors will choose to respond with giving patterns similar to the traditional deadline at the end of the calendar year," the relief group said in a statement.

Not everyone applauded the move. Becky Graninger, vice president of direct marketing for World Relief in Baltimore, said she was troubled by the proposal because it may benefit relief groups at the expense of other charities. As donors give more to one crisis, they are likely to give correspondingly less for other needs.

"Donors can only give you so much," she said. Ms. Graninger also pointed out that extending the deadline poses a challenge for charities that might have to provide many more donors with tax receipts in time for this year's filing deadline.