In Tax Reform, Declines in Charitable Giving Could be an Unintended Consequence of Simplifying the Code

Friends,

I hope you will take a look at the blog written by Sabeen Perwaiz, CEO of the Florida Nonprofit Alliance. It is important that every nonprofit organization have conversations at the board level about potential reductions in government funding as well as the potential loss of individual donations if the move to an expanded standardized deduction reduces the number of individual donors because they no longer take a deduction for charitable giving. I encourage you to discuss a few “what if” scenarios with your boards. “What if our government funding is suddenly reduced by 25%? 50%?” “What if our total donations from individuals are reduced by 25%? 50%”?” Planning will be key.

Margaret Linnane
Executive Director, Rollins College Edyth Bush Institute for Philanthropy & Nonprofit Leadership

Below is a copy of Sabeen’s blog post:

In Tax Reform, Declines in Charitable Giving Could be an Unintended Consequence of Simplifying the Code

By Sabeen Perwaiz, CEO, Florida Nonprofit Alliance

Recently, I went to Washington, D.C., and joined with more than 200 nonprofit leaders from across the nation representing a diverse group of charities to urge lawmakers to protect charitable giving in America. We gathered as part of the Charitable Giving Coalition’s “100 Years of Giving Fly-in.”

As Congress continues to tackle the largest, most comprehensive re-write of our tax code in more than 30 years, congressional leaders have made clear that one major objective is to simplify the rules for individual taxpayers. I think most Americans would welcome this relief from the over-complicated and conflicting tax code we all follow today.

But, simplifying the tax code could create major pitfalls for America’s charities.

Under the current tax code, a little more than 30 percent of taxpayers itemize their deductions. They are eligible to take the charitable deduction, and many clearly do. Giving USA reported that individual giving in America accounted for more than $265 billion to charities in 2015. Over 80 percent of those dollars are given by taxpayers who itemize and use the charitable deduction.

Why does this matter? As lawmakers aim to simplify the tax code, one appealing proposal is to raise the amount of the standard deduction and allow far more taxpayers to take the standard deduction rather than itemize. That probably sounds good to most itemizers – more certainty and less expensive tax preparation.

But there’s a consequence. Under at least one proposed scenario, an expanded standard deduction would leave only 5 percent of taxpayers who would itemize. So, only 5 percent of taxpayers would have the charitable deduction available to them.

That is one of the reasons why I joined with my colleagues to urge our lawmakers to maintain the full scope and value of the charitable deduction, as well as its possible expansion.

We also offered a solution – a universal charitable deduction available to all taxpayers. Regardless of income level, all American taxpayers should receive an incentive to give to charity. If the tax incentive is broadly available to all taxpayers, it will:

  • Increase giving, in terms of both dollars and donors
  • Increase fairness by treating all taxpayers’ contributions equally
  • Provide modest tax relief to middle- and lower-income taxpayers

Research confirms that, regardless of income level, taxpayers who receive a deduction for their contributions give more to charities than those that do not receive a deduction. Expanding a tax incentive to all taxpayers could increase overall charitable giving in America. It might also offset any declines in charitable giving resulting from any inherent uncertainty created by tax reform.

We also proposed that Congress not place limitations – such as floors or caps – on the charitable deduction. Here too, studies from diverse research institutions indicate that charitable giving would decline by billions of dollars annually if floors or caps are imposed.

Florida Nonprofit Alliance will continue to keep you informed and work with the Charitable Giving Coalition to navigate the best possible outcome for America’s charities in this tax reform process. Since its founding in 2009, the CGC has been dedicated to preserving a charitable giving incentive that ensures that our nation’s charities receive the funds necessary to fulfill their essential philanthropic missions.

 

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2017 Tax Briefing for Nonprofits

Rules are changing each and every year that impact nonprofit organizations bottom line. Savvy nonprofit organizations learn about the newest state and federal tax changes for adapting in the nonprofit market place.

Free to members and nonmembers 

Tuesday, January 24, 2017
8:30 a.m.-10:30 a.m.

8:30 AM: Networking
9:00 AM: Program

Register online now at http://bit.ly/2k0JLRR.

Continental Breakfast Included (Any nonprofit staff and board members may attend, seating is limited, registration is required)

Presenter: Kevin Margiatto, CPA, Senior Manager, WithumSmith+Brown

Sponsored by WithumSmith+Brown
withum-eps

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Giving Thanks by Giving Back

Professionals from WithumSmith+Brown, CPAs got out of the office and into their communities this week to help local charities during the firm’s 5th Annual Withum Week of Caring.

November 23, 2016 – WithumSmith+Brown, Certified Public Accountants and Consultants, conducted its 5th Annual “Withum Week of Caring”, sending everyone in their organization out into their communities to volunteer their time during the three days before Thanksgiving. With over 800 professionals across the firm’s 14 offices, the accounting staff helped 47 different charitable organizations, donating over 2,100 hours of time.

“This is our favorite outreach event of the year because of the number of people and organizations involved,” says Bill Hagaman, Withum’s CEO and managing partner.  “Giving back to local charities is an important part of our firm’s culture. This being our fifth year of holding Withum Week of Caring, it was once again a great success thanks to the many generous people of our firm.”

From serving food to a local homeless shelter to repairing and painting houses, Withum staff enjoy this special time to roll up their sleeves and donate their time and talents.  “We were excited to partner with Habitat for Humanity of Greater Orlando to assist in building homes for an outstanding organization,” says Lena Combs, a partner in Withum’s Orlando office and the organizer of Friday’s event with Habitat for Humanity of Greater Orlando. “In addition to the team building and comradery that our group of thirty volunteers experienced, we were honored to be able to take part in building a neighborhood for those in need in our community.”

Established in 1974, Withum is a top-30 nationally ranked public accounting and advisory firm with 800 staff members and annual revenue of $140+ million. Offices are located throughout New Jersey (five locations, including its Princeton headquarters); New York City, NY; Philadelphia, PA; Boston, MA; Orlando, FL; Aspen, CO; and the Cayman Islands. The firm also is a member of HLB International, a worldwide network of independent professional accounting firms and business advisors committed to assisting clients build and expand globally.

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Withum staff kicked off Withum Week of Caring on Friday, November 18 by volunteering at a Habitat for Humanity build site in Orlando, FL.

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Withum staff worked with Clean the World in Orlando, FL to assist sorting soap and other various hygiene products received from hotels, which are recycled and distributed to impoverished areas around the world.

*WithumSmith+Brown is a sponsor of the Edyth Bush Institute financial series of workshops for nonprofit organizations.

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The Certificate of Business Management for Nonprofits and You

10087747376_f81841219c_o.jpgThe Edyth Bush Institute for Philanthropy & Nonprofit Leadership is proud to partner with the Center for Management & Executive Education to introduce the new Certificate of Business Management for Nonprofits (CBM-NP).  The CBM-NP is a 14 week program that provides timely, real world business practices with nonprofit case studies and applicability. The program covers core business principles and provides an understanding of how each area contributes to the success of an organization.

What is the CBM-NP?

The CBM-NP is a professional designation indicating its recipients have gained the skills and knowledge necessary to manage a nonprofit organization.  The CBM-NP requires participation in an educational program at an accredited institution of higher learning and passage of a Certification test.

What can the CBM-NP do for you?

Enrolling in the Certificate of Business Management for Nonprofits program at the Crummer Graduate School of Business can help to advance your skills and marketability. Not only will you gain the credibility that comes with listing a certification on your resume, you will also position yourself as a motivated individual who actively seeks opportunities for learning and growth.

Individuals with the CBM-NP designation are viewed by peers and community leaders as someone who has a deeper understanding of the skills and knowledge needed to solve problems, contribute ideas, and offer solutions for a nonprofit organization. The skills and knowledge needed to propel your career and your organization to success.

How do you enroll in the CBM-NP Program?

To register, visit: http://ebi.rollins.edu/page/businessnp and complete the online application.  Tuition is  $2,695 with Early Bird Registration through November 30, 2016; and $2,995 after November 30, 2016.

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Winter Park – The Perfect Setting for Nonprofit Learning

rollins-college-rose-garden-campus_717_478_sIf you are looking for a picturesque setting to learn about nonprofits, you can’t get any better than Rollins College in Winter Park, Florida. Situated just north of Orlando, Winter Park offers a quiet setting to learn about leading a nonprofit organization. A variety of shopping, dining, botanical gardens and world-class museums are just blocks from the Rollins campus.

To add to that, Rollins College was ranked the number one most beautiful campus by The Princeton Review in 2015. The college is located on the banks of Lake Virginia and boasts Spanish-Mediterranean architecture and many flower gardens and stone walkways.

For anyone who may be traveling from out of town, the Edyth Bush Institute has worked with two area hotels to offer discounts to attendees. The Alfond Inn is located just two blocks from the Rollins College campus. Call 407-228-4007 for reservations and ask for the Rollins discount. Orlando Comfort Suites is two miles from campus near Interstate 4 (I4).  Call 407-998-8090 and ask for the Rollins discount when making reservations.

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