WASHINGTON - The dates may not be printed on many people's
wall calendars, but they mark a certain passage of time
nonetheless: the "October surprise" every four years before a
presidential election, "Black Friday" the day after
Thanksgiving in November to mark the start of the holiday
shopping season, and the "December dilemma," in which
families figure out how much they can afford to give to
charities to qualify for best possible tax deductions or tax
This December, the dilemma takes on an added dimension. As
Congress and the White House scramble to find new sources of
revenue to go with budget cuts to achieve deficit reductions
and avert a so-called "fiscal cliff," one tempting source for
creating revenue is a ceiling on tax deductions.
Father Larry Snyder, president of Catholic Charities USA,
predicted that if tax deductions are capped, "there will be a
definite decrease in the philanthropy that charities will
Leaders of charitable organizations flew en masse to
Washington Dec. 4-5 to lobby members of Congress and White
House staffers to leave charitable contributions alone.
"First of all, it's not just a tax incentive for
millionaires," Father Snyder said. "The majority of the gifts
that come to Catholic Charities organizations - and I think
last year we had almost $900 million in charitable giving -
they are $1,000, $2,000, $5,000 gifts.
"But those people do itemize," he added. "It's 30 percent of
the public, but the number of millionaires is far less than
that. It really is folks wanting to support the work of the
Released this June, a report on giving in 2011 from the
Giving USA Foundation and the Center on Philanthropy, its
research partner, showed that close to $300 billion was given
to charities. Individuals accounted for the "vast majority"
of the charitable gifts, which has been the case, the
foundation said, since it first began examining charitable
donations in 1955.
Religious organizations received $95.88 billion in 2011 and
they remain the largest type of recipient, the report said.
Frank Wright, chairman of the National Religious
Broadcasters, a largely Protestant organization, called
charitable deductions "a public policy that has proven its
worth for nearly a century." He added, "Rather than capping
or otherwise constraining this long-standing deduction, the
federal government ought to expand opportunities for the
charitable impulse of Americans to thrive."
It remains to be seen whether budget negotiators will heed
the call, as House Republican leaders Dec. 4 expressed a
willingness to raise $800 billion in revenues without raising
President Barack Obama, in a Dec. 4 interview with Bloomberg
TV, dismissed the concept of a deduction cap.
"If you eliminated charitable deductions, that means every
hospital and university and not-for-profit agency across the
country would suddenly find themselves on the verge of
collapse. So that's not a realistic option," Obama said.
A cap would be "a blow, as many have commented, to
already-hard-hit charities that are just starting to get over
the recession," said Elizabeth Boris, director of the Urban
Institute's Center on Nonprofits and Philanthropy, at a Dec.
4 institute-sponsored panel discussion.
"Philanthropy does things that government doesn't do well" or
"doesn't do at all," said panelist Robert Grimm, director of
the Center for Philanthropy and Nonprofit Leadership at the
University of Maryland School of Public Policy.
Grimm pointed to his own experience growing up in a rural
Iowa town of only 300 that was home to the state's only
professional theater company, thanks to philanthropy. He also
pointed to the example of Benjamin Franklin, who created
Philadelphia Hospital once he convinced the Pennsylvania
state government to pay half the cost if he could raise the
"Philanthropy allows each person to define their version of
the social good," with the money they contribute becoming
"their risk capital," Grimm said, adding that if given a
proposition that's "high-risk, high-reward, and is going to
fail eight times out of 10, do you think you're going to get
the federal government to do that?"
Dan McCabe, CEO of Causetown, which links projects and
donors, said studies show those who give money to a project
are more likely to volunteer their time with that project -
and those who volunteer are also more likely to give.
"Giving is sort of the gateway drug to that engagement,"
added Mari Kuraishi, co-founder and president of the
"The notion that foundations are the sole contributors to the
public good is just not true. Online is a tremendous enabler
of that fact," Kuraishi said, pointing to Kickstarter and
similar endeavors that look for investors for thousands of
projects from making wool caps known as "surf beanies" to CD
Grimm suggested altering tax deductions isn't the only threat
to charitable giving. "Reducing personal consumption is going
to reduce giving. More than capping (deductions on) giving,
raising taxes will also reduce giving," he said. Government
cuts will also play into the equation: "Government is the
biggest funder of nonprofits," Grimm noted, and "the weak
economy" has been at work in giving, since "nonprofits are
very reliant on earned revenue."
Urban Institute senior fellow Eugene Steurle said current tax
policy already has an impact on giving, as many donors say
they "give to the max," meaning they give only so much to
qualify for the largest possible deduction, but no more than
"We're seeing fewer philanthropists but more givers," McCabe
said. The trick is to get more people engaged, he added,
noting that people who spend "hundreds of hours in front of
the TV" aren't likely to be engaged or put themselves in a
position to be approached.
McCabe said eight of 10 schools do outside fundraising,
hawking items like gift wrap and chocolate bars, with school
fundraising itself having become a $4 billion industry. But
by the same token, Americans spend $4 trillion on dining and
shopping, and local businesses would love the increased
patronage in exchange for a percentage of the receipts
donated to the school or cause. "Even if I move the needle a
sliver, I can access new funds," McCabe said.
"From the reports that we have back there is universal
support for the charitable sector," said Diana Aviv,
president and CEO of Independent Sector, an umbrella group
for nonprofits after meetings in congressional offices. "They
want to support us. There is also support for the charitable
tax deduction," she added.
"But here's the rub. We hear from a lot of staff," not the
representatives and senators themselves, Aviv said. With
deficit negotiations lagging, she said she feared "the tax
deduction might get caught up in a lot of bigger issues" if
and when the talks heat up.