The Charitable Deduction Issue: A Tax Increase on Charity?

Charitable deductions and the possible changes has become a hot topic. Should individuals be allowed to deduct charitable contributions? The issue affects those public charities, public foundations and the individuals who are influenced by donation caps. Four Federal Government issues are in question: sequestration, the federal budget, federal debt limit and tax reform itself.

Left to Right: Meyer L. Bodoff, Niki McCuistion, Brent E. Christopher, Dennis McCuistion, John T. Palter

It’s proposed a cap on contributions be set at 28%. Some economists predict a 28% cap could result in a loss of $5.6 to $10 billion a year in annual contributions, with the largest donor’s contributions dropping by 28.11%. Universities, the arts and medical research may be most affected. Others say donors are not impacted by tax considerations all that much and will still give to their favored causes. Yet, the US is suffering from a $16.7 trillion deficit; the Federal government is desperate to find money. Republicans want to lower the interest rate and perhaps impose a flat tax and Democrats need money to fund and support social programs. That revenue gap needs to be bridged somehow from somewhere.

Discussing charitable deductions and the issues that surround it are:

Host: Dennis McCuistion

Guests:

• Meyer L. Bodoff, CAP – President and CEO, Dallas Jewish Community Foundation
• Brent E. Christopher – President and CEO, Communities Foundation of Texas
• John T. Palter – Managing Member, Palter Stokley Sims Wright PLLC

Should individuals be allowed to deduct charitable contributions? The issue affects those public charities, public foundations and the individuals who are influenced by donation caps. Four Federal Government issues are in question: sequestration, the federal budget, federal debt limit and tax reform itself.

Brent Christopher Testifying

It’s proposed a cap on contributions be set at 28%. Some economists predict a 28% cap could result in a loss of $5.6 to $10 billion a year in annual contributions, with the largest donor’s contributions dropping by 28.11%. Universities, the arts and medical research may be most affected. Others say donors are not impacted by tax considerations all that much and will still give to their favored causes. Yet, the US is suffering from a $16.7 trillion deficit; the Federal government is desperate to find money. Republicans want to lower the interest rate and perhaps impose a flat tax and Democrats need money to fund and support social programs. That revenue gap needs to be bridged somehow from somewhere.

Since 1971 charitable gifts have increased to $298 billion. The upward trend is continuing. Some experts claim that as the economy does better people are more likely to give. Yet this past recession negatively impacted 84% of our nonprofits and the proposed cap may well affect philanthropic causes and the charities that need funds the most.

Is there a solution that will not negatively impact nonprofits and still bring monies into government coffers? Our guests discuss the challenges and solutions of the charitable deductions issue from all sides of the equation.

Join us as we discuss things that matter… with people who care.

Niki Nicastro McCuistion, CSP
Executive Producer/ Producer
Organizational Consulting: Transitioning organizations from good to great… in leadership, strategy and governance.
www.nikimccuistion.com
(214) 394-6794

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2025 – 06.23.13