Although north country residents generously support the work and mission of nonprofit organizations throughout the year, it is usually in December that many look to make year-end contributions. ‘Tis the season for appeals arriving in your mailbox. Americans are among the most giving on the planet, contributing more than $290 billion to charitable and philanthropic organizations last year.
There are two discussions currently being had that may affect nonprofits in the future. On the national level, there have been proposals to reduce the value of charitable deductions. Since 1917, the charitable deduction has been available to individual taxpayers, since 1935 for corporations. Although research has shown that tax incentives are a secondary issue for the most passionate of donors, it is, nonetheless, something that could significantly reduce overall support of the important work done by nonprofit organizations. Although hard to quantify, studies have estimated that a charitable deduction limitation could result a loss of $4 billion and $9 billion in support of the nonprofit sector. Effectively, it would increase the “price” that would be paid to privately support charitable organizations. Funders such as the Northern New York Community Foundation and the United Way of Northern New York, who also rely on charitable gifts to do their work, are not exempt from this potential loss. This would ultimately add another layer of trickle-down effect in our region.
We all realize that nonprofit organizations serve a critical function, and often do so with much with so little and with more skill and efficiency than government. They provide all of us with enhancements to quality of life that the government cannot or should not offer. As part of the overall discussion, it is worth mentioning that nonprofits employ more than 12 million Americans, and in New York State comprise 18 percent of the workforce.
Needless to say, various organizations, including the Council on Foundations, have been actively voicing their opposition to the proposal. For the moment, with the “supercommittee” at impasse, the future of charitable deductions remains in limbo. Overall, I believe most of us would agree that we should be looking at ways to strengthen giving in today’s challenging economic environment rather than stifling it. The overall public benefit provided by the nonprofit sector is too valuable to our communities and society at large.
On the state level, Attorney General Eric Schneiderman has formed the Leadership Committee for Nonprofit Revitalization. The task force is charged with reducing regulatory burdens on nonprofits while also taking a look at strengthening overall accountability in the sector. The group of 29 nonprofit, business and labor leaders will also look at developing legislative proposals to modernize the state’s nonprofit laws, eliminating outdated requirements. Another component involves efforts to enhance board governance and effectiveness. Based on the committee composition and its diverse interests and perspectives, this bodes well for the nonprofit sector. The committee hopes to present its recommendations to the attorney general by year’s end.
Despite the economic challenges of recent years, the north country has continued the tradition of giving their time, talent and treasure. The irony of all the discussion about the mechanics of giving is that the best giving is not motivated by a desire to give less to Uncle Sam, but to return something of meaning in recognition of all that has been given to us. Every act of generosity is a meaningful one, and the important work of the nonprofit sector will always be an essential expression of gratitude.
At this time of year, the joy of giving is more apparent, perhaps because of the heightened awareness of how blessed we are and how each of us benefits from the diligent work of charitable organizations. Thinking of a community without this would cause even Ebenezer Scrooge to reconsider without Jacob Marley’s persuasive powers.
Rande S. Richardson is executive director of the Northern New York Community Foundation. He is a lifelong Northern New York resident and former funeral director. Contact him at firstname.lastname@example.org. His column appears every other month in NNY Business.