Charities Lobby Congress to Save Tax Deduction

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WASHINGTON - Charitable giving representatives from mid-Missouri descended on Capitol Hill Wednesday to lobby Congress. They wanted to ensure any federal budget deal with the "fiscal cliff" does not eliminate or change the tax deduction for charities.

The coalition had more than 240 nonprofit organizations on Capitol Hill. One of these nonprofits was Partnership for Philanthropic Planning, based out of Indianapolis, Indiana. Its 2012 national chairman of the board is Columbia resident Michael Kateman, who represented the organization and lobbied for Missouri.

Kateman said the nonprofit organization representatives attended more than 200 meetings with the House of Representatives, Senate, and White House.

Kateman himself met with Republican Missouri Senator Roy Blunt, Republican Congressman Blaine Luetkemeyer, Democratic Senator Claire McCaskill and other Missouri politicians. Kateman said Blunt and Luetkemeyer told him they do not want to touch the tax deduction. McCaskill told Kateman she supports raising the top two tax rates rather than any caps on deductions.

According to Independent Sector, a lobbying group for nonprofits, there are almost 38,000 nonprofit organizations in Missouri, making up nine percent of Missouri's workforce (about 231,000 employees). Together, the nonprofits produce about $40 billion in annual revenues--the state charity foundations alone give $856 million annually to those in need.

According to a United Way survey, two out of three Americans at all economic levels want to preserve the tax deduction.

While the tax break has been targeted in the past, Kateman said the current pressure is unprecedented.

"Without the deduction, annual giving could drop by 36 percent. The Charitable Giving Coalition estimates a cap on deduction could cost charities as much as $7 billion."

Kateman said the charitable tax deduction does not only benefit the wealthy. He said households making $50,000 to $100,000 annually benefit just as much from the deduction.

The White House wants to end Bush-era tax cuts for the wealthiest Americans. Republicans in Congress want to raise revenues by cutting loopholes and entitlements. Both sides have mentioned a possible compromise would be capping the amount of income people can claim as a deduction for charitable giving. President Obama has advocated capping the charitable deduction at 28 percent for households making more than $250,000-- these households currently claim deductions as high as 35 percent.

A May 2011 report by the Congressional Budget Office estimated eliminating the deduction, based on current levels of charitable giving, would raise about $230 billion between 2010 and 2014.