Imagine you are a construction worker called to help rebuild New York and New Jersey in the wake of Hurricane Sandy and the government came to you and said, "We really need you to rebuild our communities, but we are going to remove your hammers, saws and nails. And oh, by the way, we are going to cut the amount of funding available for you to buy building materials and pay your workers. Now, go to work and don't complain."
Essentially, that is what the president and Congress are telling nonprofits and the individual tax payers who use the Federal Charitable Deduction to support important causes. Lawmakers in Washington, D.C. want to cap or eliminate the Federal Charitable Deduction as one means of dealing with the man-made financial disaster we are calling "The Fiscal Cliff." Not only is this short-sighted, it actually makes matters worse by removing a vital tool- the charitable deduction- nonprofits will need to clean up after the drastic cuts in services that are, no doubt, on the horizon.
Here's the current reality: nonprofits are holding our social safety net together and stepping in where communities have needs. Take the most recent tragedy, Hurricane Sandy, as one example. The public response to this single event generated more than $100 million in tax deductible contributions to relief charities. The American Red Cross, Catholic Charities USA and several other nonprofits have set up relief funds for the thousands of families displaced by the storm.
Closer to home, nonprofits are major employers in Michigan due in large part to the charitable giving of Michiganders. According to a new report commissioned by the Michigan Nonprofit Association, entitled "Economic Benefits of Michigan's Nonprofit Sector 2012," nonprofit service providers generated over 435,000 jobs last year alone. Our state's 48,000 nonprofit organizations generated an additional 239,000 jobs through their spending and generated $137 billion in overall economic activity. The nonprofit sector cannot maintain its leadership role in community problem-solving, job creation and economic activity generation if lawmakers continue to remove the charitable tools we need to get the job done.
Contact your member of Congress and the president and demand that they not remove the Federal Charitable Deduction from our tool box by eliminating or capping this tax incentive for giving. We cannot rebuild if we keep losing our tools!
Kyle Caldwell is the President and CEO of the Michigan Nonprofit Association, and Robert Collier President and CEO of the Council of Michigan Foundations.