Join the Debate Over President Obama's Charitable-Deduction Proposal

March 25, 2009

Join the Debate Over President Obama's Charitable-Deduction Proposal

Followers of The Chronicle’s Twitter feed are weighing in on President Obama’s comments last night defending his proposal to limit tax breaks for charitable deductions as a way to raise money for a plan to revamp the health-care system.

President Obama told a televised news conference that the proposal, which would apply to married couples making more than $250,000 ($200,000 for individuals) starting in 2011, would not have much effect on giving and would bring more fairness to the tax code.

Some of the responses:

“I think Obama’s right. Donors give because it feels good, not because of taxes. Tax breaks don’t hurt, but it’s not the be-all.”

“In this economy any excuse not to give is bad! He may be right about fairness but it will hurt!”

“‘The most important thing I can do for charitable giving is to fix the economy.’ Amen.”

“Won’t make big difference to strategic givers with their fav orgs. More likely to decrease scattered year-end surprise giving.”

What do you think? Share your thoughts on Twitter (@philanthropy) or by clicking on the comment link below.

— Suzanne Perry

Comments

Countries with socialist govts have very low charitable giving rates. This is because the govt in effect becomes the ultimate charity decision-maker – it taxes the wealthy and not-so-wealthy at a high rate and then redistributes the funds as it sees fit. To me, this is not only an inappropriate use of govt power, it also is a grave violation of individual rights (to keep income, to give as the individual chooses).
As someone who has worked in the nonprofit sector for many years, I see Obama’s proposed charitable deductions as very undesirable for charities as well as individuals. To quote Thatcher, “The problem with socialism is that you eventually run out of other people’s money.”

— Lynn Reardon Mar 25, 12:20 PM #
Obama’s plan will almost certainly have no effect on charitable giving. But either way, charities need to think beyond asking for gifts to raise funds. Vermont’s move to recognize social-purpose businesses is a step in the right direction (http://philanthropy.com/news/government/index.php?id=4459). However, if charities want to thrive, they will need to look in new places for funding. According to the IRTA, aprx 30% of business capacity is unused. Why not tap into that vast resource through programs like Community Way (http://www.openmoney.org/cw/index.html)? Time to think outside the box.

— Alan Rosenblith Mar 25, 12:43 PM #
Thanks for this post. Twitter is a very interesting way to gather quick, person-on-the-street reactions that help spark additional dialogue.

I’m wondering why our responses are posted as if they were submitted anonymously? If I were to give the same feedback over the phone or in an email and you quoted me, wouldn’t you name the source?

— http://twitter.com/abigailgarner Mar 25, 12:54 PM #
Government has cut back and shifted funding for many social service areas over the past few decades with the hopes that private giving would increase—that just hasn’t happened.

Charitable giving in the U.S. continues to amount to about 2% of personal income and 2% of U.S. GDP. According to Colin Burke (NVSQ, 2001): “as measured by individual contributions as a percentage of after-tax (disposable) income, Americans became less generous despite great increases in standards of living, education, and the reach of liberally oriented mass media since the 1960s” (p. 185). Recent data, for 2000 to 2005 from the Urban Institute, show that there was virtually no change in level of giving if measured in constant (inflation-adjusted) dollars, though the U.S. economy expanded by more than 12 percent and total personal income increased by more than 7 percent.

No one is suggesting going socialist here, just a few cents decrease on the dollar for deductions so that we can do much more to help nonprofits and the people they serve.

— Angela Mar 25, 01:01 PM #
My fear is this is a way for the camel to get it’s nose under the tent. They will then start chipping away at the tax deductions for all charities. They have for year wanted to tax property owned by non-profits. I think this bunch wants government to be the sole provider of all social and human services This is only the first increment.

— John Marshall Mar 26, 10:03 AM #

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