Videos & Speeches
April 15 has now come and gone, known as tax day to most Americans. Millions of Americans filed their returns last month and many took into account in filing that return the dollars they contributed to charitable and worthwhile causes. According to an organization called Giving USA, Americans gave nearly $300 billion in 2011 to support important programs and services, from food pantries and medical research to youth programs and seed grants to start new businesses. Because of those generous donations of millions of Americans each year, not-for-profits have impacted the lives of countless individuals for decades.
An example back home in my State, an example of where a charitable contribution made a tremendous difference in the life of an individual is William Wilkerson, a 16-year-old from Overland Park, KS. At age three, William was diagnosed with moderate to severe bilateral hearing loss. After visiting several doctors, William was taken to Children's Mercy Hospital, where he was fitted with his first set of hearing aids. He later put into words what he experienced that day, “With so many different things that I had never heard before, it was as if somebody had turned on the world!”
Denise Miller, the manager of the Children's Mercy Hearing and Speech Clinic, said this about the importance of donations, “Because of the donor support we receive, we are able to fit the most appropriate hearing aids on each and every child, based on their own unique needs.” In 2011, the clinic fit nearly 500 patients with hearing aids bringing the world of sound to their ears and changing their lives forever.
Nonprofits like Children's Mercy Hospital depend on the generosity of Kansans and other Americans to help support their ongoing care for children. But President Obama has proposed changes to the 100-year-old tradition of providing tax incentives for charitable giving that could significantly diminish this support for nonprofits. In the President's 2014 budget is a proposal to cap the total value of tax deductions at 28 percent for higher income Americans—including the charitable tax deduction.
According to the Charitable Giving Coalition, this proposal could reduce donations to the nonprofit sector by more than $5.6 billion every year. This reduction amounts to more than the annual operating budgets of the American Red Cross, Goodwill, the YMCA, Habitat for Humanity, the Boys and Girls Clubs, Catholic Charities, and the American Cancer Society combined. A reduction in giving of this magnitude would have a devastating impact on the future of charitable organizations in our country.
Given our country's current economic situation, more Americans have turned to nonprofits for help in recent years. According to the Nonprofit Finance Fund, 85 percent of nonprofits experienced higher demand for their services in 2011 and at least 70 percent have seen increased demand since 2008.
Our country depends upon a strong philanthropic sector to provide a safety net for services, especially given the tighter local and State budgets. Americans understand the value and impact of the charitable deduction, which is why a recent United Way Worldwide survey found that two out of every three Americans are opposed to reducing the charitable tax deduction.
Nonprofits are best equipped to provide assistance on the local level and can often do so in a far more effective manner than many government programs. Studies have shown that for every $1 subject to the charitable deduction, communities will receive $3 in benefits. The Federal Government will be hard-pressed to find a more effective way to generate that kind of public impact. Congress has previously acknowledged the benefits of private investments and regularly passes charitable giving incentives in the wake of a natural disaster to encourage more giving.
Last October, when Hurricane Sandy tore across the east coast, the storm left thousands of residents without the basic necessities of life: food, water, and shelter. Within 6 weeks, the American Red Cross served more than eight million meals, provided more than 81,000 shelter stays, and distributed more than six million relief items to thousands of residents impacted by the storm.
In times of crisis, Americans depend on relief service organizations such as the American Red Cross, Catholic Charities, and the Salvation Army—all not-for-profit organizations whose main purpose is to help their fellow citizens when they need it the most. Nonprofits such as Habitat for Humanity also help families make a fresh start in life after a disaster. In May of 2007, an EF5 tornado swept through my home State of Kansas devastating 95 percent of the town of Greensburg.
Diana Torres, a single mom, had lived in Greensburg for nearly seven years when the tornado destroyed the home they were renting. Diana faced the likelihood of having to move out of State. Then the Wichita Habitat for Humanity stepped in with 1,400 volunteers to build a new home. Because of special financing and donated supplies, Diana could afford to purchase the home for her family.
Executive director of the Wichita Habitat for Humanity Linda Stewart said those who support Habitat “know they are making a difference in someone's life that lasts for years. That is what not-for-profits do every day across Kansas and around our country. They make a difference one life at a time.”
Since the founding of our Nation, neighbors have been helping other neighbors. They lend that helping hand that is so often needed. The charitable deduction is one way to encourage that tradition to continue. Any change in the Tax Code related to charitable giving would have a long-lasting and negative consequence, not necessarily to the generous donor but, more importantly, to the millions of Americans who rely upon the services provided by a charitable organization. With our economy still recovering and the tremendous need for charitable causes, the President should be encouraging Americans to give more, not less, and Congress should reject this administration's proposal.