Philanthropies oppose talk of limits on tax deductions

Philanthropies oppose talk of limits on tax deductions

Call incentives vital to their bottom lines and delivering services

New Jersey’s Jewish federations are urging members of Congress to vote against any limits on charitable tax deductions.

In a vigorous letter-writing campaign, leaders of Jewish nonprofits say the deductions are an important incentive for givers and that reducing them could hobble their charitable work.

Currently, taxpayers are exempt from paying an estimated $50 billion a year.

Looking to reduce the budget deficit, the Obama administration has floated a proposal that would limit charitable deductions to 28 percent, down from the current cap of 35 percent.

Another plan, supported by former Republican presidential candidate Mitt Romney and other GOP members, would cap charitable deductions somewhere between $25,000 and $35,000 a year.

Max Kleinman, executive vice president of the Jewish Federation of Greater MetroWest NJ, attended a Dec. 5 meeting of the New Jersey Center for Non-Profits, a statewide umbrella group of NJ charities, where the issue was on the agenda.

“Clearly, having these deductions is a positive incentive for people to give to charity,” said Kleinman. “The not-for-profit sector provides 12 percent of the jobs in the United States — which accounts for 340,000 jobs in New Jersey with expenditures of $37 million. They are like a whole bunch of small businesses, and if their revenues go down, the unemployment rate will go up.”

“The demands on nonprofit providers have soared since 2008, increasing an average of more than 75 percent each year, while private donations and public grants have decreased,” said Assemblywoman Valerie Vanieri Huttle (D-Dist. 37). “Despite these ongoing challenges, the nonprofit sector continues to provide critical services and opportunities for those in need and is a stabilizing force for our economy.

“ I am grateful for the invaluable contributions of our nonprofit organizations,” said Huttle, “particularly in these still difficult times.”

Tim Delaney, president and CEO of the National Council for Nonprofits, issued a blunt warning: “A cap on the charitable deduction could deal the final blow to many nonprofits, adding to the several layers of cuts that have already left many organizations struggling to keep their doors open and services going.”

Kleinman is urging members of the Jewish community and beyond to “do a full-court press on this issue.”

“Morally, at a time when there is high unemployment and people are hurting, to remove incentives for charitable giving is ethically wrong,” he said.

The federation joined a nationwide lobbying effort by the Charitable Giving Coalition, a group of 250 national charities, including the Jewish Federations of North America.

“This is a time to write a letter and pick up the phone and reach out to everybody,” said Jacob Toporek, executive director of the NJ State Association of Jewish Federations. Melanie Roth Gorelick, director of the Community Relations Committee of Greater MetroWest NJ, drafted a letter that was forwarded to federation contacts around the state.

“Any diminution in the tax incentive for charitable giving will have a direct impact on our bottom line and a direct impact on our ability to provide the necessary services to those most in need in our communities,” it read in part.

Although proposals to trim charitable tax deductions crop up from time to time, Toporek said, he believes they are more serious now than in the past.

“I think the pressure is on. After four years of cuts and the latest election results, I think it is a vital time to voice our concerns,” he said.

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