Some charities concerned by 'fiscal cliff'
Published: Wednesday, December 5, 2012 at 6:47 p.m.
Last Modified: Wednesday, December 5, 2012 at 10:36 p.m.
Time will tell where, if anywhere, negotiations on the so-called fiscal cliff lead, but some concerned charities are fighting against any possibility that tax deductions on giving will be cut.
On Wednesday, a national coalition of nonprofit agencies was on Capitol Hill to lobby on the issue. Across the country, United Way chapters, including those in Marion and Alachua counties, mobilized supporters to contact members of Congress and press to preserve the deductions in any potential deal to avert the mix of spending cuts and tax increases dubbed the fiscal cliff.
The United Way of North Central Florida uses community donations to support about 28 charities in six counties, including Alachua. Spokeswoman Kim Faenza said the nonprofit is concerned about a chilling effect on those donations.
"We're just coming out of the recession, and we're coming back up slowly," Faenza said. "Having this hit us before we're fully recovered would make a huge difference in what we can fund."
United Way of Marion County President Maureen Quinlan said she believed lowering or eliminating the deduction on charitable donations would provide a short-term solution to federal budget issues with long-term effects on nonprofit organizations' ability to provide services in the community.
"It's an incentive for some donors to give at such generous levels," Quinlan said of the deduction.
As it stands, no specific proposal from Democrats or Republicans has targeted charitable deductions. But some nonprofit networks remain concerned pressure to raise revenues will lead there.
On Wednesday, spokesmen for Marco Rubio and Bill Nelson both said Florida's U.S. senators oppose cuts to the deductions.
Currently, individuals may file for a standard tax deduction ($5,950 if filing single or $11,900 for joint returns) or claim itemized deductions above those amounts. Seventy percent of filers take the standard deduction, while the majority with income above $75,000 itemize, according to a June report from the Tax Policy Center.
The current maximum deduction for charitable contributions is 50 percent of an individual's annual adjusted gross income.
The Joint Committee on Taxation estimates the deduction costs federal coffers $246.1 billion over five years.
On the other hand, charitable giving in 2010 reached about $291 billion in 2010, according to a report by Giving USA.
Interfaith Emergency Services in Ocala is fully funded by charitable donations that go toward services that include groceries for 300 families a week, emergency prescription assistance and a shelter. Interfaith Executive Director Karla Grimsley voiced concerns that some services would be scaled back or eliminated if the 100-year-old federal deduction for charitable giving was lowered.
"I know without a doubt some people will not give as much without that deduction," she said.
Theresa Beachy, the executive director of Peaceful Paths, a Gainesville nonprofit assisting domestic violence victims, said the uncertainty swirling around the federal budget talks already has affected giving because of the "perceived impact that people think raised taxes will have on their ability to give."
Beachy said a scaled-back deduction "could be a huge impact for us." She noted that large contributions such as a recent $1 million gift bring significant deductions for donors. Beachy estimated that the agency gives out upward of 500 tax receipts a year and usually sees a spike in donations toward the end of the calendar year by those seeking to meet the tax deadline.
"They say ‘I need to meet my obligation to make it easier on me in April,' " Beachy said. "And if that incentive is not there, there would be a segment of the population that might not write that check."
St. Theresa Catholic Church in Belleview relies on donations to fund a soup kitchen, food pantry and financial assistance to low-income families for utilities and rent.
Jimmy Johnson, the church's director of social services, said that most donations are small and come from people "who have a few extra dollars in their pocket."
Still, a cut to, or elimination of, charitable giving deductions would have a negative impact, he said.
"If we're looking for cash donors and these monetary donations are no longer eligible, we'd lose 25 percent (of our donations)," Johnson said.
Debbie Talbot, development coordinator at Bread of the Mighty food bank in Gainesville, said she was hopeful that any changes to deductions would not impact donations, which are already down in a time of increased need.
"Your grassroots organizations, most of our donors, don't give in huge chunks," she said. "A lot of people give to us because they care about the issue of hunger. It's a cause for them."
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