On Valentine’s Day, 14 state and local United Way CEOs, as well as United Way Worldwide CEO Brian Gallagher, testified before the U.S. House of Representatives Ways and Means Committee about preserving the charitable tax deduction and the central role that charitable giving plays in strengthening communities.
Gallagher urged the committee to preserve the charitable deduction for all donors and asked that they consider ways to further incentivize private charitable giving. The CEOs of the 13 state and local United Ways testified that a modification to the charitable deduction would impact their ability to respond to the unique needs of their community.
The Internal Revenue Code provides a deduction to the roughly one-third of taxpayers who itemize their deductions for charitable contributions. Taxpayers may contribute on a deductible basis to charities, churches, universities, hospitals, museums, and certain other tax-exempt organizations. Limiting the deduction would result in reduced giving to charity and significantly affect our sector’s ability to deliver social services.
Americans give for a variety of reasons. It is rare that someone gives to charity only because of a tax incentive, but tax incentives are often a factor in how much someone donates. In a recent study, United Way Worldwide found that 23 percent of high net-worth individuals indicated that receiving tax benefits for their charitable contributions was a “major” motivation for giving.
At the same time that government funding for human services is being cut, we cannot afford to limit charities' capacity to serve communities. That amounts to a double-hit for people who need help the most. With today's economic realities, we should be incentivizing more charitable giving, not less.
In addition to the hearing, 100 state and local United Ways visited Capitol Hill during the past week to lobby policymakers on protecting the charitable deduction and averting the sequestration that will take effect on March 1.
Combined, across-the-board cuts to discretionary education and human service programs and limits to charitable giving incentives in the tax code could leave millions of Americans who need help with no place left to turn. United Way will continue to advocate for policies that strengthen and support the vulnerable communities we serve.
If you would like to advocate for the preservation of the charitable deduction, you can learn more at www.unitedway.org/advocate. At this site, you can also learn more about United Way’s national public policy priorities and how you can get involved.
It takes many voices united to make a difference. Thank you for Living United!