How will the Fiscal cliff affect JC Arts

Non-profit organizations have been working overtime the past several months to impress on our elected officials the importance of not messing with the charitable contributions tax exemptions.

Although the exemption remained, it did not do so without some changes. Legislation passed by the House and Senate will limit the amount wealthy people can claim for charitable deductions on their taxes.

While it would be nice to think that people make contributions to non-profits because they know the importance of the work the non-profits do and they want to support those good works, even my rose-colored glasses don’t have that dark of a shade of rose. We were reminded of that by the public comments of elected officials who came right out and said that since they won’t get as much of a tax deduction their contributions will be less in 2013.

The cap on charitable contributions only applies to individuals making $250,000 or more, or couples making $30,000 or more. But, according to Philanthropy News Digest, the new cap on tax deductions could potentially deter giving by anywhere from 0.4 percent to 2.3 percent –- up to $7 billion a year.

It reinstates a provision eliminated in 2010 that reduces itemized deductions by 3 percent of the amount that household income exceeds $300,000. Write-offs grow more limited the more taxable income a person has and could reduce the value of deductions by up to 80 percent for the highest-income taxpayers, according to the Tax Policy Center.

Giving has already been down in 2012 by individuals. Those who did give often ended up giving more, but the number of people giving was down.

Of course I have to look at how that affects us at JC Arts. While most of our donors are in the 98% who do not fall in that higher pay bracket, the damage is done when our elected officials put out such negative messages, such as they won’t give as much this year.

Although I don’t believe that most of our contributors give simply so they can get something back from the government, a negative connotation to giving is raised when our elected officials and some the 2% begin stating that they won’t give as much.

I’m not going to sit back and wring my hands over this; non-profits simply need to find new and creative ways to raise the necessary funds.