CRUNCHEd: a blog about people and numbers

Defending Charitable Deductions: 10 Unlikely Partnerships We’d Love to See


The "fiscal cliff" debate may be resolved, but it’s just a temporary fix. The future of budget policy is an open question. Democrats point out that spending cuts alone will never close the deficit or pay the debt, while Republicans generally admit the need for more revenue yet always balk at increasing the nominal rates. So what solution remains? Tax reform, which both parties have hinted they’d like to achieve. During the presidential campaign, for instance, Mitt Romney’s official stance was to lower rates while "closing the loopholes."

Though he never specified which loopholes he might eliminate, one of the write-offs that people take advantage of the most is the charitable deduction. $38.2 billion was deducted for contributions to charitable organizations last year. Americans are a giving people, even when they’re not trying to dodge taxes, and it makes sense that we would incentivize charity. Still, the debt is a problem and the money has to come from somewhere. But if this deduction is threatened, look for an unprecedented outpouring of outrage from a vast variety of groups. Here are just a few of the strange bedfellows who benefit from the status quo and would fight tooth and nail if it’s threatened:

  1. The Roman Catholic Church and Planned Parenthood

    Beginning our list are two of the nation’s most popular and lucrative charities, sworn enemies since the latter’s founding by Margaret Sanger in the early 20th century. The most intense flashpoint has been abortion, of course, but even Planned Parenthood’s broader mission of providing contraception is anathema to the Church. Still, they represent two of the largest recipients of charity dollars in the country, and you can count on both to go ballistic if those revenue streams are threatened.

  2. The National Football League and the American Ballet Theatre

    Yes, the NFL is a nonprofit, though not a charity: it’s classified as a 501(c)6, rather than a 3, but this commercial powerhouse is tax-exempt nonetheless. So they won’t have to worry about a decline in subscribers, but they’d hate to start having to pay taxes. The, um, more delicate sport of ballet does depend on the goodwill of donors rather than printing money through broadcast deals and licensing (not many ballet Fatheads or jerseys being sold). But with all the nonprofit involvement in athletics at every level, expect the fierce opposition to tax reform to look a little something like this.

  3. People for the Ethical Treatment of Animals and the National Rifle Association

    PETA is a 501(c)3 devoted to animal rights, while the lately controversial NRA is designated as both a 501(c)3 and a 501(c)4, enabling it to both participate in political campaigning and raise money as a charity. As they’re both on the hunt for tax-free donations, look for these natural enemies to make common cause. The lion may not exactly lie down with the lamb, but lobbyists for both predators and prey are sure to rear their heads.

  4. The Association on American Indian Affairs and the Professional Cowboy Association

    The great "horse operas" of the American mythology known as the Western have always pitched the cowboys against the Indians. But these two nonprofits will circle the wagons if their tax exemptions are called into question. One seeks to sustain an occupation and lifestyle, the other the welfare of an entire people. They demonstrate, to different extents, the fact that America counts on charitable giving to preserve much of what we value.

  5. Focus on the Family and the American Civil Liberties Union

    James Dobson’s socially conservative advocacy group doesn’t think Americans should be allowed to gamble, look at porn, have abortions, have various kinds of sex, or wed someone of the same gender. The ACLU thinks Americans should be free to do pretty much whatever they please. Talk about an odd couple. Can this marriage last? Doubtful. But look for them to be (closeted) partners in fighting any attempt to limit the deductibility of charitable gifts.

  6. The Human Rights Campaign and The Church of Jesus Christ of Latter-Day Saints

    Speaking of same-sex marriage, California’s Proposition 8 fight pitted gay rights groups against defenders of "traditional" unions. In a pungent historical irony, the most prominent financial powerhouse supporting the ban was the Mormon Church. Though history seems to be breaking in the HRC’s direction, there’s one status quo they’ll want to preserve, along with their opponents: the tax structure that allows them to operate a 501(c)3, 501(c)4, and a political action committee, all ostensibly separate.

  7. Campus Crusade for Christ and the Freedom From Religion Foundation

    Whether you’re tired of being proselytized to, or just tired from proselytizing all day, one thing that puts the fear of God back into you is facing a bevy of new levies from the IRS. Infidels and believers alike can rest easy knowing that their deductions for donating to these groups are likely to remain in place. Here we have a case of the unstoppable force meeting the immovable object, but when it comes to tax avoidance, even the atheists will find themselves on the side of the angels.

  8. The Heritage Foundation and the Center for American Progress

    Senator Jim DeMint of South Carolina recently made news by resigning his safe seat in the world’s greatest deliberative body in favor of heading up the Heritage Foundation. Whether that speaks to the sclerosis of the Senate or the power of political machines posing as think tanks (and which of those is worse news), we couldn’t say. But if ever the liberal Center for American Progress can get behind its right-wing counterpart’s anti-tax stand, it’ll be the day that it and its donors are asked to pay the piper.

  9. Forgotten Cats and Dogs Finding Dogs

    One of these charities traps, neuters, and releases feral cats. The other employs the famed olfactory tracking skills of dogs to locate other lost dogs. Normally the furry populations they serve would be fighting like, well, you know. But if Washington ever passes tax reform, the prophecy uttered by Dr. Peter Venkman in Ghostbusters will come to pass: "This city is headed for a disaster of biblical proportions … Human sacrifice, dogs and cats living together … mass hysteria!"

  10. The American Heart Association and the Brain Research Foundation

    If Congress did try to abolish tax-free donations, these two medical philanthropies would be in perfect concord. Hearts and minds would be won for the cause of the charitable deduction, whether motivated more by cold deductive logic or charitable big-heartedness. In the end, these exemptions are likely to remain untouched. If they only had the nerve, politicians could patch a big hole in the government’s revenue collection, but they would end up looking pretty brainless and heartless.

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