Charity Inc.: A constant state of self-defense

View original, May 3, 2017, from the Journal Record

For the past several years, I have encouraged the charitable sector in Oklahoma to become more engaged in advocacy efforts, especially at the state level.

Nonprofit organizations have been at the forefront of strong advocacy efforts, and a recent Washington Post article pointed out that philanthropy has been instrumental in shaping large-scale policy shifts. Today, the charitable sector is poised to work with government in ways to help those most in need with expertise and intimate understanding of the issues faced by our state and our communities.

Unfortunately, advocacy is turning into self-defense. With our state budget in crisis and looming issues at the federal level, the charitable sector could be at a breaking point. Nonprofits are faced with unprecedented demand. Philanthropy, while strong, is being asked to foot the bill for core services.

Last week, the White House presented a one-page outline of a tax-reform proposal that – at first glance – looks to protect the sector. However, digging deeper, we see that these proposals, coupled with cuts to domestic programs suggested earlier in the year, will have a disastrous, mega-tsunami effect on the charitable sector.

When you add in the issues at the state level (and Oklahoma isn’t alone, with more than half of the states facing budget deficits), nonprofits won’t be able to serve the increased demand for services.

The White House tax reform proposal includes language that would raise the standard deduction. At face value, this helps simplify the tax code dramatically. However, only 30 percent of Americans itemize on their tax returns. By doubling the standard deduction, the Urban Institute predicts that number will fall to just 5 percent. On top of this, the reform proposal, while protecting charitable giving incentives through deductions, did not mention that the president called for a cap on those deductions for wealthier donors.

Finally, eliminating the estate tax as proposed last week could give donors less incentive to create family foundations, donor-advised funds or planned gifts for nonprofits.

We will be watching this changing landscape closely to protect the sector, the nonprofits, the donors and most importantly the people we serve. Nonprofits should continue to monitor public policy shifts and engage in advocacy, but we don’t feel the sector should be in a constant state of self-defense.

Marnie Taylor is president and CEO of the Oklahoma Center for Nonprofits. She can be reached at (405) 463-6886, ext. 201, or mtaylor@oklahomacenterfornonprofits.org.

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