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Speer: Charitable tax deduction needed

December 14, 2012
Bill Speer - Editor/Publisher , The Alpena News

People give to charities for a variety of reasons.

Diane and I do so as blessings. We've been blessed, so in turn, we want to share our blessings with others.

Others do so out of obligation. Some enjoy the feeling it gives them afterward, while others do it for the tax savings it generates.

In this season of giving, when charities normally see a spike in the contributions coming their way, there is concern on the street.

As the country marches closer and closer to that "fiscal cliff," one of the suggestions floating over Washington, D.C., is one of doing away with the tax deductions that charitable giving generates. By eliminating the deduction, more taxes would be generated, or so this train of thought seems to run.

However, it is a train of thought that needs derailed now, and quickly, for I fear charities would be impacted greatly if this were to be implemented.

At a board meeting of the Community Foundation for Northeast Michigan this week Executive Director Barb Willyard shared with members her concern with the discussions. She asked her board to contact legislators, both federal and state, and share with them the negative impact such a move would have on nonprofits.

Without a doubt that impact would be significant.

Peter Orszag, former director of the White House Office of Management and Budget, recently said "The charitable sector has the most to lose from a limitation on itemized deductions."

In information shared by the National Council of Nonprofits, in a recent poll they conducted, 30 percent of Americans said they would reduce their giving if tax incentives were removed and of that 30 percent, 62 percent said their reduction would be by a "significant amount."

As a citizen who has donated my time to a number of nonprofits over the years, I understand first hand how these groups year after year always try to rub two pennies together to form a nickel. I cringe thinking how they might suffer from even less contributions were the tax incentives to be removed.

Trust me, I don't know of any nonprofit in Northeast Michigan right now that has an abundance of operating funds. Instead, I know of many where sacrifice isn't an option being discussed, but rather a daily occurrence that was implemented years ago.

According to officials of the Michigan Nonprofit Association, "Michigan's nonprofit sector has continued to grow in a time of economic turmoil. It has provided not only relatively stable employment opportunities in a state with a high unemployment rate, but it is also and important contributor to Michigan's overall economy."

Those officials added that nonprofit organizations in Michigan generate around $137 billion each year in economic activities and provide employment to 11 percent of the state's population. One out of every 10 workers in the state is employed by a nonprofit.

Like it or not, tax deductions are a strong motivator for many to participate in philanthropic efforts. If Congress and President Obama were to remove the incentives, I would hate to see valuable projects, services and care be curtailed because donations had decreased as a result of that action.

Contact your U.S. Congressman and senators and let them know you don't want to lose the tax benefits that come from charitable contributions.

Were that to happen, it would have a chilling impact on nonprofits and their effectiveness everywhere.



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