Nancy Brinker: Why we must preserve the charitable tax deduction

(Daneli Photography llc)

Donating to charities is a part of American life. According to the World Giving Index, the United States is the most generous country in the world, followed by Ireland, Australia, New Zealand and Britain. According to another study, ordinary individuals gave 73 percent of the money donated to U.S. charities in 2010 — more than $200 billion.

In addition to money and used items, Americans also donate their time as volunteers. Last year, more than 64 million Americans worked as volunteers — almost 27 percent of the entire U.S. population.

Loving your neighbor is not judged in dollars donated. In fact, it should not be judged at all. Anyone who gives something to someone in need expecting nothing in return is to be respected.

The facts bear out that even in tough economic times, America has not lost her philanthropy. The moment we do, America will cease to exist, as we know it.

Americans should be proud that philanthropy and charitable giving is not just a practice of the wealthy. It is ingrained in our culture.

The Tax Foundation found that: “The income tax's charitable deduction serves the valuable purpose of encouraging private giving. Private charities are often more cost conscious, responsive, better targeted, and invite greater citizen participation than government outlay programs. The deduction also recognizes that people contributing to charities are transferring part of their incomes to others, which reduces their ability to pay taxes out of what remains.”

As we approach 2016 many candidates are advancing their tax plans and some incorporate the elimination of all deductions including the charitable deduction. These plans must be scrutinized and understood in the macro and micro of their economic cause and effect.

In January of 2014, I was heartened when a bipartisan group of U.S. Senators banded together to keep the charitable deduction out of tax reform legislation. The Hill reported the following on this effort: A coalition of 35 senators, 17 Republicans and 16 Democrats, argued that the cherished deduction is not a loophole but “a lifeline for millions of Americans in need.” The letter was noteworthy for the senators who agreed to back it. Centrists like Sen. Susan Collins, R-Maine, appeared alongside conservatives such as Sen. Tim Scott, R-S.C., and liberals like Sen. Ed Markey, D-Mass.

Congressional tax writers have spent months scouring the tax code in a complex effort to overhaul the nation’s tax laws, and insist they are looking at every provision with a fresh, scrutinizing gaze. But the broad group of senators contended that the charitable tax deduction is unique and should be left untouched as part of any overhaul effort.

They argue that, if Congress were to trim the deduction or eliminate it altogether, it might raise governmental revenue, but at the expense of millions, who rely on charitable giving, incentivized by the tax code, to provide support.

“The charitable deduction is unique. It is the only provision that encourages taxpayers to give away a portion of their income for the benefit of others,” the senators wrote. “Analysis has repeatedly shown that proposals to cut, cap, or limit the charitable deduction could cause charitable donations to decline by billions of dollars annually.

“We believe the federal government must affirm its long-standing dedication to encouraging private acts of charity and compassion, especially when our charities and the people they serve are facing so many challenges,” they added.

Backers of the deduction cheered the letter, calling it a “clear signal” on the importance of the charitable deduction.

I could not agree more. As someone who founded one on America’s and the world’s most successful not-for- profits -- Susan G. Komen and Race for the Cure, I can attest first hand to the value and reliance on the charitable deduction to the success of the important work the government is not doing -- or cannot not do as well -- as charities in education, screening, research and finding cures for diseases.

I implore all men and women of good will who are seeking the office to the presidency, U.S. Senate and House to preserve the charitable deduction.

After all, charity begins at home.