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Excerpt from testimony by Independent Sector CEO Diana Aviv at the Hearing on Tax-Exempt Organizations, House Ways and Means Committee Subcommittee on Oversight, May 16, Washington
"Many charitable nonprofit organizations have struggled to keep pace with this increased demand [on services] in part because they saw revenues fall during the economic downturn. From 2007 through 2009, annual charitable giving declined by almost $30 billion as Americans struggled to navigate a difficult economy. Federal, state and local budget cuts have further burdened and diminished the capacity of nonprofits, and this has disproportionately affected people who are least able to help themselves.
"There are meaningful ways in which Congress might help charitable organizations secure the support they need to deliver these much needed services. Specifically, we ask that you enact the expired tax extenders without delay. It is difficult to overstate the urgency for our community, and the people we serve, of immediately reinstating the charitable giving incentives in the tax extenders package, which include the IRA charitable rollover as well as enhanced incentives for the donations of food, books, computer equipment, and land conservation easements.
"More broadly, as Congress looks toward comprehensive tax reform, we ask you to keep in mind the value of charitable giving to the work of public charities and private foundations, and the important role of tax policy in encouraging that giving. We know that Americans give generously to the causes they care about; we also know that how much and when they give is influenced by incentives in the tax code. There is perhaps no better illustration of this than the fact that more than 22 percent of all annual online charitable donations in the U.S. are made on Dec. 30 and 31, as taxpayers seek to make donations before the deadline to claim a charitable deduction. Millions of lives are improved every day because our tax laws encourage people to give, and I urge you to explore ways to increase the impact of those incentives.
"As the committee looks ahead and prepares for tax reform, it may also be instructive to look back to the Tariff Act of 1894, which first exempted from federal income tax organizations operated for charitable purposes, and the Revenue Act of 1917, which first made donations to charitable organizations tax deductible. In both instances, Congress embraced the entire range of social purposes and important causes that citizens – individually or collectively – might choose to pursue through charitable organizations. Whether focused on the arts, social services, scientific research, or spiritual matters, this great American tradition has sparked innovation, saved lives, and enriched our communities. Through the wisdom of these decisions, Congress established century-old policies that have stimulated charitable giving, and made it clear that our government and our society value the contributions made by every charitable organization."