Tuesday, June 14, 2011

When the tax man cometh, what are you gonna tell him about your charitable deductions?

Throughout the development of US civil society (and credibly, the non-profit sector), citizens have had the unique privilege to decisively care for, protect, and preserve the institutions that have enabled the growth of American society, and the charitable tax deduction has been a significant part of this social exchange.

The non-profit community consists of hospitals, universities, libraries, museums and theatres, civil rights organizations, community development organizations, and a myriad of other social assistance providers. Creating this protective layer within our society has enabled this country to supplement government services in a way that is unmatched in other nations, and charitable contributions have been an essential part of building such a strong sector.

The Revenue Tax Act of 1917 ensured that Americans would be able to receive attractive tax benefits as a result of offering contributions to government recognized charities. While this model has been replicated in different corners of the world, the early century timing of this legislation enabled the non-profit sector in the United States to grow during times of both economic growth and hardship, political celebration and uncertainty, military peace and warfare, and both decline and regrowth in the private sector, as we are now observing.

In every aspect of preserving the values and advantages of civil society, our national history points us to the time during which leaders encouraged citizens to create organizations (and provide resources that support them) so that we may enjoy healthy communities and the standards of an excellent quality of life. Supporting non-profit organizations was not simply an act of generosity and benevolence. Instead, it marked a time when strengthening the voluntary sector was a privilege of those who were able to do so – and more importantly, it was a responsibility.

As shareholders guide the success of corporations in the private sector and elected officials direct growth in the government sector, the onus is on us, the general public, to drive progress in the Third Sector – the voluntary world of non-profit organizations. While volunteering, donating, and serving on the boards of non-profit organizations are certainly the most well-known ways to strengthen the sector, there is also the opportunity to partner with policy thinkers to think though how we can ensure the continuity and expansion of legislation that protects the sector and the key component that sustains it - the charitable deduction.

Conversations are currently underway in Congress about how laws regarding charitable tax deductions may be altered, which would severely impact the system of 1.6 million public charities, private foundations, and religious congregations governed by current legislation.

Here are a few ways that you can be an active participant towards ensuring that these conversations work towards a most beneficial end for the Third Sector:

1. Stay informed – Organizations like Independent Sector have a strong grasp on the conversations that shape policy related to the non-profit sector. At the very least, checking the website once a week ( will enable the non-profit community to remain aware of relevant news.

2. Add your voice – In 1976, Congress passed legislation that outlined the types of nonpartisan lobbying activities that non-profits may conduct. With guidance from the non-profit organisations that mean the most to you, be sure that your voice and presence are part of the important conversations that are happening now.

3. Do something…and NOW – The economic messiness of the past three years places us in a unique position: with the devolution of government programs and services, the non-profit sector has the opportunity to strengthen the laws that govern its impact and ensure a much more sustainable voluntary sector. By being in touch with your elected officials, offering support to the non-profit organizations in your community, and actively convening to build knowledge and familiarity with proposed changes to legislation, your voice can be part of the movement to further protect and preserve the sector that has added tremendous benefits to Americans.

By strengthening the support for legislation (like the Revenue Act of 1917) that ensures the wellbeing of a strong Third Sector, we as a national community can continue to provide and benefit from the superior services, care, and human connections provided by healthy and sustainable non-profit organizations.

Know that you can be a part of building something big, and be sure to take steps now.

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