Charitable Tax Incentives Discussed at House Hearing

Although no specific tax legislation affecting charitable giving incentives is being planned, more than 40 witnesses representing a variety of non-profits - including NAICU - testified about tax incentives for charitable giving at the February 14 hearing of the House Ways and Means Committee. The hearing was the latest in a series that began last year to examine the possible impacts of any major tax reform.

The committee offered an open invitation to members of the nonprofit community to share their views, and representatives from faith-based, service, and educational institutions responded in force.

On behalf of NAICU and the Council for Advancement and Support of Education (CASE), Jake Schrum, president of Southwestern University in Texas, testified in strong support for maintaining the charitable tax deduction with no dollar limitations. He maintained that the charitable deduction should not be considered as mainly a tax break for the wealthy, since the highest-income donors are less likely to change their charitable giving based on tax incentives than are those at lower income levels. Schrum noted that those moderate-income gifts are crucial to charitable organizations and those they serve."

Also testifying for the higher education community were Mark Huddleston, president of the University of New Hampshire and past president of Ohio Wesleyan University, and Eugene Tempel, founding dean at the Indiana University School of Philanthropy. Huddleston spoke about the benefits of charitable giving for both public and private universities, while Tempel provided the committee with research and analysis on the percentage of individuals who give to charitable organizations. Tempel urged the committee to carefully consider the enormous scope and impact of charitable giving on charitable organizations before proposing any significant changes to charitable giving incentives as part of tax reform.

Representatives from faith-based and children’s medical organizations, the United Way, the foundation community, and others also testified. Diana Aviv, president and CEO of Independent Sector, specifically noted the importance of the IRA charitable rollover to the nonprofit sector, and urged that it be made a permanent tax benefit. Currently the rollover provision is set to expire in December 2013, after being retroactively extended for two years as part of the Fiscal Cliff deal (see earlier Washington Update story).

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Karin Johns