The impending “fiscal cliff” which has been the hot topic in the news recently, has the potential to not only hit the wallets of all taxpayers, but also the bank accounts of many nonprofits if some of the proposed reforms are enacted. A quick Google search on this topic returned about 7,000,000 hits – that’s a lot of news and interest!
The Charitable Giving Coalition has taken an active role in trying to protect the interests of all nonprofits. Some of the changes proposed by lawmakers include either capping itemized deductions at 28% (which include charitable contributions) or eliminating the deduction and replacing it with a new tax credit, which most likely would not be refundable.
A recent article by Robert Frank of CNBC.com reported that “charitable giving in 2001, about 70 percent came from individuals” and “about half of that 70 percent comes from the top three percent of earners,” the group that would most likely see the biggest impact on any proposed deal on the fiscal cliff, including either limiting or eliminating certain deductions.
Lawmakers are feeling pressure to quickly come up with over $1 trillion in revenue and savings over the next ten years, and it seems that, things that once seemed to be “sacred cows” are receiving new scrutiny. All we can hope is that this deduction, which helps the mission of so many nonprofits, can be allowed to remain.
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