Nonprofits Watch Tax Reform Shifts



Leaders in the nonprofit sector usually prefer to sit political discussions out, but at the most recent installment of SRQ’s SB2 symposium series, Philanthropic Agenda, leaders from the area foundations said they have been closely watching recent debates in Washington on tax reform, concerned about how any change in tax structure could impact deductions and incentives for giving.

“If you watch some TV channels, this is going to be so good, and we’re going to have so much money, and we’re all going to be so happy and we’ll all be rich and have more to give. If you watch other stations, this is the worst thing that ever happened and we’re all going to be broke and we’re all going to be homeless,” said John Annis, senior vice president of Community Investment for the Community Foundation of Sarasota County. “I think it’s probably going to be somewhere between those things, and we’re all going to have to see what happens.”

Mark Pritchett, president and CEO of the Gulf Coast Community Foundation, said his main concern right now was the increase in standard deductions, which could lead to more people choosing that route instead of opting to file for individual deductions. “The fear is if we minimize that people won’t give individually to charities.”

Monica Van Buskirk, president and CEO of the Van Wezel Foundation, says shifts that discourage such deductions could impact long-term giving. While initial gifts may come from a place of pure generosity, letters send out by charities to donors to help them claim deductions help develop loyalty among those sending checks. “It makes them come back,” she says.

Carol Butera, executive director of the William G. and Marie Selby Foundation, said that the changes remind her of the sharp shifts in estate tax rates earlier this decade. “In 2010, the estate tax was repealed, which at the time caused a 39 percent reduction in the amount,” she said. “Then in 2011, it was reintroduced, and that was a 93 percent increase in the estate tax. In broad strokes, that can have a major impact.”

Martha Wells, representing the Southwest Florida chapter of the Association of Fundraising Professionals, noted other changes could affect the very mission of nonprofits, particular a change that could allow charities to engage in more overtly political activity. “Broadening that mission would make it more challenging to have confidence and make sure it (donations) gets used the way a donor intended,” she said.

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