That’s one of the big questions facing community foundations and other philanthropic leaders as we look to the future. It was also a topic of critical conversation during my time at this week’s Foundations on the Hill.
The event, organized by the Forum of Regional Associations of Grantmakers, Council on Foundations and Philanthropy Roundtable – Alliance for Charitable Reform, brought leaders from the foundation sector to Washington, D.C. to help tell the story of giving and grantmaking throughout the country.
As I learned more about proposed policy changes, it became clear that there certainly could be big changes—and that the charitable deduction benefit is in jeopardy. As I visited one-to-one with key Congressional offices, it is clear we could lose this important incentive encouraging Americans to give. I am truly afraid of the unintended consequences of how our government is looking at the charitable deduction.
Many might question if it really matters—after all, there is a common misperception that the charitable deduction benefits only the wealthy. That’s just not the case. Let me be clear, the charitable deduction is not a loophole, it is a lifeline for the beneficiaries of our charitable giving including children, elderly, veterans, schools, homeless, those who have lost jobs, food shelves, those in the midst of a natural disasters and many more…including our rural communities.
According the Minnesota Council on Foundations, about one-third of Minnesota residents—at every income level—reported making contributions. Here’s the breakdown of giving by income levels:
- 61 percent had income less than $50,000 and gave $346.6 million
- 36 percent had income of $50,000-$200,000 and gave $1.6 billion
- 3 percent had income more than $200,000 and gave $1.1 billion
But, I think the more important question we should be asking is, “Who’s really going to be hurt by these changes?”
If limits are placed on the charitable deduction, a national survey in 2012 by United Way Worldwide showed charities and the millions of people they serve could lose up to $5.6 billion. That would equal the entire budgets of The American Red Cross, Goodwill Industries International, Inc., YMCA of the USA, Habitat for Humanity, Boys & Girls Clubs of America, Catholic Charities USA and American Cancer Society.
These seven organizations serve more than 50 million people combined—and ALL of them serve people in our southwest Minnesota regional community.
So, what can we as leaders do? I encourage us all to contact our Representatives and Senators in Congress and share why the charitable deduction is important to ALL of us and needs to be protected. If you’d like more information, visit www.cof.org/topic/foundations-hill.