Posted by William Dauster, VP Marketing and Foundation Jun 4, 2013


To even the biggest skeptics of recovery, the latest economic reports all point to a continued and more robust economy.  The Dow is exploring new heights, unemployment claims are down and housing prices are moving in the right direction.

As we look back upon the Great Recession, many have a kinder view of the work of non-profits who helped feed, clothe and provide health care for those who lost the ability to do for themselves and their families during this troubled time.  The donors with the biggest hearts and not always the deepest of pockets gave during the worst of times because they knew their gifts would make a difference.  And they did and we are forever grateful.

So in many ways, professional fundraisers and the not -for- profits they work so hard for, should see a better playing field in their everyday search for charitable support in the days and months ahead.  But as the recession’s clouds clear, a new and somewhat formidable barrier to charitable giving, the life blood for non profits, is building support in Washington and across the country.

The current effort to do away with the charitable deduction would be a serious and damaging economic blow to the non-profit sector.  Its impact is doubled as it comes amid a tide of reduced government funding.

Throughout my 30 years in non profit work, fundraising professionals have always said that the primary reason for a donor’s giving habits was not the charitable deduction but rather the passion to support an organization they care deeply about. Perhaps we chanted that to ourselves because our work is about connecting donors to our causes, and we know that habitual giving begins with involvement.

I have taught my kids about giving, its importance in American society and to their own communities and explained the tax deduction as a value-added act that shows our government supports it wholeheartedly.

 But truth be told, the deduction’s value is even more clear and impactful. A calculation of the deduction shows that for every one dollar of potential tax revenue invited through the deduction, the public and communities across America received approximately three dollars in philanthropic services. In essence, giving has a multiplier effect.  Rather than removing the charitable deduction from our tax code, we really should be enhancing the deduction in some way and supporting the important role of philanthropy in our society, not creating further burden. Canada is doing just this in a myriad of ways including the provision of tax credits for “first time” charitable gifts.

The value of charitable deduction has found its way over the last 20 years into sophisticated financial constructs that provide tremendous benefits to donors and charities alike. These gifts, often categorized as “planned gifts”, have been growing in great numbers as the boomer generation begins to shift its wealth to the next generation. The estimated numbers in this broad transfer of wealth is astounding and may not involve charities should this deduction be erased from our national tax plan.

In his recent appearance before Congress, Andrew Watt, President and CEO of the Association of Fundraising Professionals, called the charitable deduction “a powerful symbol of the American tradition and system of philanthropy.” He goes on to say that the deduction’s “symbolic nature nearly outweighs its monetary” values and represents a “gesture of confidence on the part of the people and that it binds together the interests and concerns of all us in the betterment of our society.”

As the House Ways and Means Committee takes a more serious look in mid-June at this issue among others in their tax reform quest, there is never a better time to reach out to your representatives and ask them to fight to keep the charitable deduction in place. Be sure to tell them you know someone who benefitted from the good work of a non-profit during the recession and you feel really good about the impact of your own charitable giving.