Could Changes in the Charitable Deduction be Good for Charities?

Source: The Chronicle of Philanthropy

Proposals to limit or even eliminate charitable tax deductions are a new norm for members of Congress and White House officials, and rightfully so, nonprofit leaders are cautious of how proposed changes might stifle charitable giving.  

In an op-ed piece published by The Chronicle of Philanthropy this week, Brian Mittendorf, associate professor of accounting at Ohio State University raises the argument that “it’s possible that tax reform could offer the potential to expand charitable giving, or at least not cause the decline that many fear.”

Mittendorf points out some imperfections of the current tax break, including:

• “People who itemize are the only ones who can get a tax break for giving” and
• “Among those taxpayers who do itemize, not all get an equally generous tax benefit from giving.”

Taking into consideration President Obama’s proposed 2015 budget and proposed tax credits, Mittendorf suggests that, “By talking about new ways to approach the giving incentive, rather than simply insisting the charitable deduction be left ‘as is,’ nonprofits may end up with a workable compromise or even better: a world in which charitable giving incentives are made stronger.

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