Doing God’s work: nonprofits lobby to keep tax deductions for donors
By Julie Filby
As 2012 was winding down, the country buzzed with talk of the impending “fiscal cliff”—a combination of tax increases and government spending cuts to sharply reduce the federal budget deficit.
As Washington, D.C., debated how to avoid falling off the cliff, one of the items on the table was the potential to reduce incentives for charitable giving. In response to this, a team of 200 people representing nonprofit organizations all over the country was organized and asked to speak to Congress. Their mission: let lawmakers know what a change like this would mean to them—and those they serve.
Since 1917 taxpayers have been allowed to deduct gifts to charitable and nonprofit organizations. The deduction was intended to subsidize organizations that provide alternatives to direct government programs. Ending the deduction could mean less in donations to charities and nonprofits.
Maribeth Hanzlik, executive director of Seeds of Hope, was asked to join the Colorado team. Seeds of Hope is a charitable trust that provides scholarships to low-income students to attend Catholic schools in inner-city Denver. Hanzlik headed to Washington, D.C., Dec. 4-5 with six other Coloradans.
“It was a little bit daunting because it was a huge responsibility,” Hanzlik told the Denver Catholic Register from her office Jan. 7. “So I just prayed that maybe one word of what one of us said would reach the heart of somebody who was going to make the decision.”
Other team members were from Catholic Charities of Central Colorado, Association of Gospel Rescue Missions, Peak Vista Foundation, Denver Hospice, the El Pomar Foundation and the Daniels Fund.
“We represented nonprofits serving children, the homeless, seniors, those near end of life, and the seriously ill,” Hanzlik explained.
At the Capitol, they met with the offices of Sen. Michael Bennet, D-Colo.; Sen. Mark Udall, D-Colo.; Rep. Diana DeGette, D-Colo.; Rep. Doug Lamborn, R-Colo.; and Sen. Michael Enzi, R-Wyo. There they lobbied to convince them that the amount of money nonprofits save the government exceeds the amount the government would save by eliminating the tax deduction.
“It’s all such funny money … because the amount (eliminating the deduction) would save our government is $5.6 billion,” she said. “However the amount of good that we do is so much more than that, it exceeds that many, many times over.”
Seeds of Hope has served nearly 14,000 students with more than $23 million in financial assistance since its inception in 1996.
“If we can educate the under-served and minority population, which we do so well, they have a much better chance of ‘making it’ and having the American Dream,” she said, which also decreases potential for government reliance in the future.
“(But) if our top donors decide that they’ll give less … that little bit less can be catastrophic to our Catholic schools,” she said. “It means there are fewer kids we’re going to be able to give scholarships to.”
She believes their visit had an impact.
“It looks like we made a difference … this time,” she said, “that taking away the nonprofit tax deduction is not going to be on the table, for now, which is huge.”
It was heart-warming to hear the congressmen recognize their work, she said
“I believe that local charities and nonprofits know the needs of their clients far better than the federal government,” Lamborn told the Register in an email. “I want to ensure that contributions to those organizations remain tax deductible.”
He agreed nonprofits such as Seeds of Hope benefit the government.
“There are tremendous blessings to both the giver and the receiver in private charity that are absent from large federal bureaucracies,” he wrote. “Americans are the most generous people in the world when it comes to charitable giving.”
Americans gave nearly $347 billion to charity in 2011, a 7.5 percent increase over the 2010 total of $322 billion, according to the 2011 report from Atlas of Giving.
“Other nations look at us as a beacon of hope because we find a way to encourage our wealthiest to give to our poorest,” Hanzlik said. “The beauty of nonprofits is that we all try to do our little piece of God’s work in meeting the needs of our country’s poorest.”