I happen to work for a nonprofit organization in San Luis Obispo County. Over the past couple of years, most nonprofits across this country have seen their donations reduced. It’s quite understandable, given the economic recession we have been experiencing.
However, I am greatly concerned that donations will be substantially reduced across this country if the proposed American Jobs Act passes in its present form. The cost of the act is estimated to be $467 billion.
Of that amount, according to the White House, $405 billion will be paid through a provision in the act limiting the itemized deductions for charitable contributions and other deductions that can be taken by individuals making more than $200,000 a year and families making more than $250,000. In other words, this provision would generate income by limiting how much these taxpayers can deduct for charitable and other itemized deductions.
According to the National Center for Charitable Statistics, a program of the Center on Nonprofits and Philanthropy at the Urban Institute, statistics for the 2006 tax year showed that only 2.9 percent of filers reported adjusted gross incomes of at least $200,000.
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Yet despite the small size of this group, their itemized charitable donations accounted for 38.4 percent of all the itemized charitable donations made in the U.S. that year, by taxpayers from all income levels. Most likely, these higher-earning taxpayers will react to lesser income in their pockets by reducing the amount that they donate to nonprofits. If that happens, this reduction on top of the reduction over the last few years will be devastating.
We all want to get out of this downturn in the economy; we all want more jobs created; and we all want our government to come up with a solution to get us moving again. I am hoping that Congress and the president will do the right thing for all of us. I just hope that it is not at the expense of nonprofit organizations that are truly helping those who are in need.
What can be done? Well, the old cliché “contact your congressional representative” probably won’t work. Whether they are Democrats, Republicans or independents, most of them are set in their ways and won’t budge on anything. What you can do is feed your nonprofits of choice with their lifeblood — donations.
Whether you have a large income or a small income, the next time you have an opportunity to donate to a nonprofit organization, give with a smile — it will come back to you tenfold!
Ron McEvoy is the event and media coordinator for Hospice Partners of the Central Coast in San Luis Obispo.