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Contact Your Members of Congress to Protect the Charitable Deduction!

(Sept. 29, 2009) The White House and some members of Congress have been pressing for harmful limits on charitable deductions to fund healthcare reforms.

At this very moment, the Senate Finance Committee is working on a bill on healthcare reforms.  AFP has since learned that there are at least 25 proposed amendments that would cap the value of the charitable deduction. This cap would create a huge disincentive for charitable giving!

Currently, taxpayers earning more than $200,000 (and families earning more than $250,000) annually can take itemized charitable deductions at a rate equal to their marginal tax bracket (33 percent or 35 percent).

The amendments to the America's Healthy Future Act of 2009 would cap the value of itemized deductions at 33 percent, or 35 percent for taxpayers whose income tax brackets would increase to 36 percent or 39.6 percent in 2011.

In other words, they would be taxed at 36 percent or 39.6 percent but would only be able to take a 33 percent or 35 percent deduction respectively for their charitable gifts.

What can you do?

Please call or email your two Senators to oppose any amendments that would cap the value of the charitable deduction. 

Identify your two U.S. senators.  Use this link to determine your two U.S. senators: U.S. Senators by State

Call the congressional switchboard (202-224-3121) and ask to speak to one of your Senators.

The following are draft talking points and a draft letter that you can use as templates.

Thank you for taking action!

Talking Points

  • Say that you are calling from the Senator's state. Please tell them your hometown and mention the name of your organization.
  • Urge the Senator to protect the value of the charitable deduction by rejecting any amendments to the healthcare reform bill that would cap itemized charitable deductions.
  • State that capping the value of the charitable deduction would harm the charitable sector by creating a disincentive for individuals and households who give the most to charitable organizations. Note that capping itemized deductions 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 Senator to protect nonprofits in their state by opposing any provision that would limit the charitable tax deduction. [Mention the potential impact on your organization and/or your surrounding community].

Sample Letter

Dear Senator [enter name of your Senator],

As a member of the Association of Fundraising Professionals (AFP) and a constituent, I strongly urge you to protect the value of the charitable deduction and reject any amendments that would impose a cap on charitable deductions. With so many Americans relying on the charitable sector, now is not the time to jeopardize the charitable gifts that are so important to the strength and vitality of our country.

Currently, taxpayers earning more than $200,000 (and families earning more than $250,000) annually can take itemized charitable deductions at a rate equal to their marginal tax bracket (33 percent or 35 percent). A number of amendments to the America's Healthy Future Act of 2009 would cap the value of itemized deductions to 33 percent or 35 percent for taxpayers whose income tax brackets would increase to 36 percent or 39.6 percent in 2011.

Charitable organizations are dealing with enormous financial challenges stemming from the economic downturn. Charities have seen an increased demand for their services as individuals and families struggle with financial uncertainty. At the same time, many state and local governments, facing their own budget challenges, have delayed or reduced payments for services provided by charitable organizations. Facing this combination of growing demand and delayed payments, charities are increasingly turning to private sources for support in a tough charitable giving environment.

Limiting the value of the charitable deduction would hurt these efforts by creating a disincentive for individuals and households who give the most to charitable organizations. According to the 2008 Bank of America Study on High Net-Worth Philanthropy, high net-worth households (household income greater than $200,000 and/or net worth of at least $1 million) account for between 65 and 70 percent of all individual giving in America. While these individuals and households would probably continue to give if the value of the charitable deduction is reduced, it would likely affect the timing and size of their gifts. Even though the proposals would not take effect until 2011, our members report that donors are already delaying gifts and multi-year pledges.   [Mention the potential impact on your organization and/or your community if charitable donations decreased as a result of the proposed amendments].

Again, I urge you to protect the value of the charitable deduction reject any amendments that would impose a cap on the deduction.

Sincerely,

[Please provide your name, your organization and hometown]



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