Charitable deductions might not take a hit
December 20, 2012
Nonprofit leaders might begin to feel more at ease about their 2013 prospects, given that preliminary reports relayed to Republicans on Monday suggest the Obama Administration has left the charitable deduction rate untouched
at 35 percent, according to The Chronicle of Philanthropy.
It was originally proposed that charitable deduction should be capped at 28 percent for high-income taxpayers. If this went through, a $1,000 donation would only generate $280 in tax savings as opposed to the $350 it used to yield, the source adds. Nonprofits worried this might discourage America's top earners from supporting charities at the same rates.
However, this sparked an outcry among nonprofit organizations that rely on contributions from the wealthy to operate sustainably. To prevent this addendum, many organizations rallied together to explain how the lowered tax break would negatively impact the important work they do in the country. The fact that the White House has heard the nonprofit community and backed away from its position suggests their concerns have been heeded.
"If there is fluidity and movement in regards to treating the charitable tax deduction differently than other deductions, then that's terrific," Diana Aviv, chief executive of Independent Sector, told the source. "It means the community’s voice has been heard."
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