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Help AFP Fight Proposals That Would Limit Charitable Deductions


(Sept. 8, 2009) Now that Congress is returning from the August recess to resume its work, the White House continues to press for harmful limits on charitable deductions to fund healthcare reforms. AFP urges you to contact members of Congress immediately to oppose these measures.

Two forms of a limitation on charitable deductions have been touted as a means of paying for health care reforms:

  1. The Obama Proposal: For those individuals who earn more than $200,000 (and those couples and families who earn more than $250,000), this proposal would limit the federal tax deduction they may take for their generosity to 28 percent (starting in 2011). Currently, they may claim up to a 35 percent deduction. This tax policy change would effectively devalue charitable gifts made by the very people who are in a position to make substantial donations at a time when they are sorely needed.
  2. The Alternative Proposal: When the tax rate likely increases to 36% and 39.5 % for certain taxpayers in 2011, their charitable deduction would not be increased proportionately. Instead, it would remain at its current levels (33% and 35% respectively).

AFP opposes both proposals and any other proposal that would impose limits on charitable tax deductions. Both of these proposals would create a disincentive for taxpayers who give the most to charitable organizations to continue their generosity. Moreover, both proposals, in essence, impose a tax on charitable giving.

What You Can Do

It appears that some Members of Congress are seriously considering this limitation on charitable deductions as a means of funding health care reforms. Therefore, it is vitally important that you weigh in with your two senators and House member NOW to ensure that neither provision is enacted into law.

Detailed instructions are below.

Identify your U.S. representative and two U.S. senators.

Use this link and type in your zip code to determine your U.S. representative: http://www.house.gov/zip/ZIP2Rep.html.
Use this link to determine your two U.S. senators: U.S. Senators by State

  1. Call the congressional switchboard (202-224-3121) and ask to speak to your House member or senator. Use the following talking points.
    • Say that you are calling from the senator’s state or the representative’s district. Please tell them your hometown.
      Ask the member of Congress to oppose any funding proposals for health care reforms that would impose limits on charitable tax deductions.
    • Explain that President Obama’s proposal to pay for health care reforms would limit the federal tax deduction to 28 percent for individuals earning more than $200,000 and couples and families making more than $250,000 starting in 2011. Currently, they may claim up to a 35 percent deduction.
    • Add that an alternative proposal to pay for health care reforms would freeze the federal tax deduction at the current rates (33% or 35%) for certain taxpayers when their tax rates would increase in 2011 (to 36% and 39.6%).
    • Note that both proposals would harm the charitable sector at a precarious time.  The Giving USA Foundation recently reported that in 2008, the decline in total charitable giving was the greatest since the organization began tracking U.S. charitable donations in 1956. Charities are already reporting that donations will likely be down further in 2009.
    • State that in these challenging times, charities and nonprofits already are finding it difficult to fulfill their missions because of reduced donations and resources.  At the same time, charities are being asked to provide even greater levels of assistance.
    • Finally, emphasize that your organization and many people in your state are counting on the member/senator to protect nonprofits in their district/state by opposing any provision that would limit the charitable tax deduction. [Mention the potential impact on your organization and/or your surrounding community].
       
  2. Mail three letters, one each to your U.S. representative and two U.S. senators. Cut and paste the sample letter below into your word processing software and personalize it with your own information (places where you can include your personal information are indicated in bold in the sample letter below)
  • the representative’s or senator’s name and salutation
  • your name and address
  • a line or two about the impact the provision would have upon your organization.
  • any other information you would like to add about your organization and its impact upon the community.

 

Sample Letter

DATE

For U.S. Representative, use:
Dear Representative LAST NAME:
U.S. House of Representatives
Washington, D.C. 20515

For U.S. Senators, use:
Dear Senator LAST NAME:
U.S. Senate
Washington, D.C.  20510

As a member of the Association of Fundraising Professionals (AFP) and a constituent, I urge you to oppose any funding proposals for health care reforms that would impose limits on charitable tax deductions.

AFP represents 30,000 individuals who are responsible for raising money ethically and effectively for a wide variety of charities—from large multi-national institutions to small grassroots organizations—engaged in countless missions and causes. AFP members are required annually to sign our Code of Ethical Principles and Standards, the only enforced code of fundraising ethics in North America.

The president has sought to fund health care reforms by limiting the federal tax charitable deduction to 28 percent (starting in 2011) for those individuals who earn more than $200,000 and those couples and families who earn more than $250,000.  Currently, they may claim up to a 35 percent charitable deduction.

An alternative proposal to fund health care reforms would freeze the federal tax deduction at the current rates (33% or 35%) for certain taxpayers when their tax rates would increase in 2011 (to 36% and 39.6%).

Both proposals represent a significant change in tax policy and would have incredibly negative impacts on charitable giving. The Giving USA Foundation recently reported that in 2008, the decline in total charitable giving was the greatest since the organization began tracking U.S. charitable donations in 1956. Charities are already reporting that donations will likely be down further in 2009. [Mention the potential impact on your organization and/or your community if charitable donations decreased as a result of this provision].

In these challenging economic times, charities and nonprofits already are finding it difficult to fulfill their altruistic missions because of reduced donations and resources.  Yet, in times of economic trouble, it is charities and nonprofits that do much to augment the work of the federal, state and local government in meeting the needs of the American public through their vital programs and services.  In fact, charities currently are being asked to provide even greater levels of assistance. 

The federal government, therefore, should seek ways to bolster charitable giving—as opposed to requiring charities to do more with less.

For these reasons and for the sake of the nonprofit community, I strongly urge you to oppose any provision that would limit the charitable tax deduction

Sincerely,

YOUR NAME



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