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Foundation Leaders Offer Ideas for Charitable Expansion – and Washington is Listening


Last week, several foundation leaders were not dissuaded by nearly 100 degree temperatures and high humidity as they set out to meet with key legislators and tax staffers to make the case for expanding the charitable deduction for all Americans.

Reps. Tom Reed (R-NY), Cathy McMorris Rogers (R-WA), House Ways and Means Committee Chairman Kevin Brady (R-TX), and tax staff from Senate Majority Leader Mitch McConnell’s (R-KY) office listened intently, encouraged open discussion and welcomed our input and advice.

In fact, we were so buoyed by the reception to our ideas and their willingness to engage that we were perfectly primed for a highly-anticipated session with Vice President Pence, the final meeting of the day. Even if we had scripted it ourselves, it wouldn’t have been as significant or momentous as it was.

A very gracious Vice President Pence expressed his gratitude for our efforts to come to Washington to meet with him, for our commitment to our communities and for supporting the broader charitable sector. He was engaged and attentive and he asked relevant questions that proved a knowledge and appreciation of the value of the independent sector to civil society.

As Congress moves closer to tackling tax reform in this calendar year, we saw this as an opportunity to set the stage for expanded thinking on the subject when deliberations begin. A profound threat to the sector exists in a proposal to double the standard deduction as part of tax reform – a move that would likely significantly reduce charitable giving.

While we understand the economic benefits to middle-class taxpayers of doubling the standard deduction, it likely will have unintended consequences. The current 33 percent of itemizers will be reduced to an estimated 5 percent, effectively making this a tax vehicle available only to the elite.

Why not, we asked, consider expanding the charitable deduction to all Americans, regardless of income, charitable capacity or socioeconomic status? Referred to as a universal charitable deduction, all charitable gifts – whether $10.00 or $10 million – would be recognized by the government and will serve to strengthen the sector with an estimated increase in charitable giving of $5 billion.

We argued that the charitable deduction is truly unique. It is unlike any other deduction, because it does not serve the individual claiming it, but instead serves the public good. As noted by Adam Meyerson, president of the Philanthropy Roundtable, it provides a necessary guardrail between government and civil society, allowing the charitable sector to remain independent as it was intended. Finally, it allows American citizens to exercise some control and influence for the common good, in accordance with their own values, in their communities.

We were deeply encouraged that those we spoke to in Congress and the White House said we were doing exactly what we should: engage lawmakers, tell our stories and put these complex issues into a community context. Our stories resonated because they are stories about real life, real people and the potential consequences of Congressional decisions on tax reform. We were urged to keep engaging.

The story sharing did not end with our lawmakers. An off-the-record meeting with journalists who have followed foundations, charitable organizations and who are watching tax reform closely proved to be one of the more enlightening events of the gathering. Just as we are eager to get the positive word out, the journalists are eager to get the story right. They too were grateful for the opportunity to form a relationship of mutual trust and honest exchange. Perhaps this is an opportunity to be bold and to elevate the sector to new heights.

This administration is focused on economic growth. As Vice President Pence said to us, "Each of us knows charitable giving is fueled by generosity and by economic growth."

Given that growth, we want to see that charitable giving is maximized in the best possible way. This is the 100th anniversary of the charitable deduction – expanding it to a universal deduction seems, to me, the right thing to do. Congress has a rare opportunity to make history in this sector by allowing all Americans’ financial contributions to be counted.

Thanks to the Philanthropy Roundtable and the Alliance for Charitable Reform for organizing a memorable and groundbreaking day.

Mason Rummel is president and CEO of the James Graham Brown Foundation.

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