OGF Opposes Charitable Deduction Cap
An open letter to Ohio’s congressional delegation
Ohio Grantmakers Forum recognizes the need to simplify and revise the federal tax code, including charitable incentives. However, during these very difficult times we cannot support the current proposal to cap the charitable deduction for federal taxpayers at 28 percent. This 7 percent decrease would bring about dramatic drops in charitable giving at the very moment when such gifts are desperately needed in communities all across our state. We urge you to voice your support for the thousands of nonprofits providing critical, increased demands for service by joining us in opposing this proposal.
Independent research has analyzed the potential impact of the proposed change, estimating that charities would lose anywhere from $2.4 to $9 billion a year – funds that are desperately needed in the face of massive federal and state budget cuts and unemployment that hovers around 9 percent. These losses would result in cuts in services and employees at nonprofits, which account for about 10 percent of the economy in Ohio and the country.
Reducing the charitable cap not only will impact these charities directly, it will also impact the nation’s foundations, which rely heavily on charitable donations from individuals who trust foundation leaders – like Kathryn Merchant at the Greater Cincinnati Foundation – to identify the best nonprofits and critical needs in their communities. Such cuts also would come on the heels of dramatic decreases in charitable giving: individual donations to charities fell 7 percent from 2008 to 2009 in Ohio, following a more significant decrease of 11 percent in 2008.
We strongly believe that nothing should be done at this time to discourage charitable giving. Nonprofits are an important way the basic needs of Americans are met. To reduce their capacity to help, without providing alternative means of support, makes no sense to us.