The following blog post, written by San Diego Grantmakers Director of Communications Michelle Slingerland, is a featured article in NCG’s current Public Policy Digest. NCG’s Public Policy Digest is developed and presented by California Philanthropy, a Northern California Grantmakers, San Diego Grantmakers and Southern California Grantmakers collaboration.
Just before the winter holidays, it seemed the country was consumed with concerns about the approaching fiscal cliff–and the philanthropic sector more specifically with the potential impacts to the charitable deduction.
Ultimately, the passage of the American Taxpayer Relief Act of 2012 (H.R. 8) didn’t impact the charitable deduction through a cap on itemized deductions, though it did reinstate the Pease limitation on itemized deductions for those making $300,000 or more. The legislation’s extension of the IRA Charitable Rollover through December 31, 2013 was widely viewed as a win for the sector, though.
Now once again there is concern–about the approaching deadline for sequestration, the delayed decision about the debt ceiling, and about charitable deductions being vulnerable once more as part of upcoming tax reform efforts (on February 14, the House Ways and Means Committee will hold a hearing to examine the itemized deduction for charitable contributions).
We’ve sorted through the abundance of information on these topics as they relate to philanthropy to (hopefully) help you easily understand these complicated issues:
On H.R. 8 & Charitable Deductions:
The Alliance for Charitable Reform, Council on Foundations, Independent Sector and National Council for Nonprofits all published pretty succinct and easy-to-understand summaries of the fiscal cliff deal reached at the end of 2012:
In the Associated Press article “Charities Worry New Tax Law Will Reduce Donations” analysis by the Urban Institute is cited, suggesting that the Pease limitation “has negligible effects on the tax incentive for charitable giving.” Read the full Urban Institute report >>
The Alliance for Charitable Reform has also created a “Charitable Deduction Central” web page that includes a good collection of related news stories.
On Pending Tax Reform
The op-ed, “The End of Charity?,” while clearly promoting one desired policy toward tax rates and the charitable deduction, also details some of the approaches to tax reform we may hear debated in the near future.
Tim Delaney, President and CEO of the National Council of Nonprofits shared a presentation that details the potential impacts of sequestration during a January 28th webinar hosted by California Philanthropy–Northern California Grantmakers, San Diego Grantmakers and Southern California Grantmakers–and CalNonprofits.
The Nonprofit Roundtable of Greater Washington has compiled a host of resources about sequestration impacts, including reports, news articles, and even a contingency checklist.