The Danger of Capping Deductions

THE DANGER OF CAPPING DEDUCTIONS To avoid the "fiscal cliff," Congress is considering a cap on all tax deductions, which could harm local communities. The giving incentive makes a difference 30% of Americans said they would reduce 20% of online their giving if tax incentives were removed. Of those, 62%: giving by a "significant amount." donations are made on said they would decrease "The charitable December 30 and 31.! sector ... has the most to lose from a limitation on itemized deductions" Peter Orszag Former Director, White House Office of Manangement and Budget Who gets hurt by reduced contributions? Churches and Other Human Services Individuals & Arts & Cultural Organizations Schools and Religious Institutions Organizations Communities Educational Organizations Giving incentives save government money Hurting nonprofits hurts our economic recovery. Programs provided by nonprofits for children, seniors, and people with disabilities allow their families Nonprofits employ 10% of the American workforce to continue to work full-time and rely less on Every nonprofit that is forced to close its doors means more people unemployed and fewer people served. government programs. What a cap on all deductions would mean Average Deductions NO ROOM /$15,000 Cap $20,000 Cap UNDER THE CAPS FOR CHARITABLE $11,593 State/Local Taxes $10,640 Mortgage Interest DONATIONS Nonprofits are already struggling with... Increasing need for services Percent of nonprofits reporting an increase in demand for their services over the previous years 85% 77% 77% 2011 2009 2010 73% 2008 Declining resources Federal: Already cut $1 trillion with more on the way via the fiscal cliff's sequestration cuts. Foundation assets declined by 17% in 2008," so they have had less to give. In constant dollars, giving declined by 14% from 2007 to Additional burdens from Individuals & not paying full costs on government-nonprofit contracts. Government 2008, and decllined another 8% Foundations from 2008 to 2009. Take action today at www.GiveVoice.org Sources The Online Giving Study, Network for Good, and True Sense Marketing (2012) *Charitable Tax Deduction Poil, United Way Worldwide (Conducted November 2012) An Overview of the Nonprofit and Charitable Sector. Congressional Research Service (Nov. 17, 2009) * Average Tax Deductions, State by State, Wall Street Journal (Nov. 18, 2012) State of the Sector 2012. Nonprofit Finance Fund NATIONAL COUNCIL OF NONPROFITS National voice. State focus. Local impact. t of 2011 and Crisis: Government's Human Services Contracting "System" Hurts Everyone. www.councilofnonprofits.org National Courncl of Nonprofits (Oct. 7, 20101 *The Norproft Almanac 2012, Urban Insttute (2012) The Norprofit Almanac 2012. Urban Insttute (2012) © 2012 National Council of Nonprofits. All rights reserved.