Dave Wills, president of the National Christian Foundation (NCF), testified before the House Ways and Means Committee on behalf of Philanthropy Roundtable’s Alliance for Charitable Reform. The committee held the hearing to discuss charitable giving incentives as it moves toward possible tax reform.
In his opening statement, Chairman Dave Camp (R-MI) said, “Because of the critical role that charities play, the Committee needs to hear directly from the charitable community before considering any proposals as part of comprehensive tax reform.”
Wills, an activist in the philanthropic sector for over 20 years, underscored the Chairman’s remarks in his oral testimony. “The charitable deduction plays a crucial role in the health and wellbeing of our society. Simply put, a decrease in charitable deduction affects what the charity will receive. It is not the taxpayer who is harmed. It is those who need charitable services the most.”
During the question and answer portion, Members inquired about the range of options for altering the charitable deduction. This included discussion on if and how the tax code could direct charitable donations toward specific services, and ways to regulate some for-profit business dealings by nonprofit entities
The hearing featured testimony from several of ACR’s partners in the Charitable Giving Coalition as well as many others in the charitable community who are concerned about tinkering with the charitable deduction. You can read all the testimonies submitted to the committee here.
One testimony of interest came from Brent Christopher, president and CEO of Communities Foundation of Texas in Dallas. Christopher provided his own unique perspective. Speaking of the deduction he noted “…since 1917, the charitable deduction has been a vital thread in the fabric of charitable giving in America. It may not be the primary motivation, but it definitely affects the size and the timing of charitable gifts. It is not a ‘loophole’ that needs to be closed. It is a multiplier of generosity.”
In a statement for the record Alex Reid, currently a tax counselor at Morgan Lewis and a former staffer on the Joint Committee on Taxation, made the legal and constitutional argument for why the charitable deduction is different. There is currently no written justification for the charitable deduction in tax law, unlike all other tax deductions. Without this justification, he cautioned, the charitable deduction will always be at risk by revenue-seeking government, threatening its neutrality in society.
We at the Roundtable and ACR firmly believe the charitable deduction is a vital and unique incentive. It is different from other tax benefits; it encourages individuals to give away a portion of their income without receiving any financial gain. Read our statement on the hearing here.
As our nation continues to face many fiscal concerns, now is not the time to do away with the charitable deduction. This action will simply shift the burden onto the philanthropic sector and communities that depend on them.
Today’s hearing made it apparent that the charitable deduction and philanthropy is very much on the minds of lawmakers as they look toward tax reform. As the possibility of tax reform grows more and more imminent, it has never been more important for us to continue our work with Congress to ensure the charitable deduction is protected.
Click here for video of ACR’s interview with Dave Wills, Brent Christopher, and John Ashmen, following their testimonies before the committee.
Check out additional news coverage of the hearing: