By Kris Hermanns
Each year Philanthropy Northwest and a group of our member grantmakers travel to Washington, D.C., to share our views on the latest charitable legislation. Attendees have the opportunity to develop and grow relationships with Members of Congress, who are most influenced when constituents from their states or districts advance a cause on behalf of themselves and their national organizations. This year, a number of funders that are based in or support causes in Montana attended, including representatives from Dennis & Phyllis Washington Foundation, M.J. Murdock Charitable Trust, Northwest Area Foundation, and Pride Foundation.
I was fortunate to be invited to Foundations on the Hill last March, an event coordinated by the Council on Foundations and the Forum of Regional Associations of Grantmakers, which includes our own Philanthropy Northwest. The two-day program came as the U.S. Senate was debating and voting on the FY2013 Continuing Resolution to prevent the government from shutting down one week later. It was also a timely opportunity to be in our nation’s capital because of the growing chorus calling for serious tax reform. Senator Max Baucus (D-Montana), Chair of the Senate Committee on Finance, is heading this effort.
Changes in the tax code could include eliminating or restricting charitable tax deductions. While different scenarios are being hashed out, one thing we do know is if we create disincentives for people to donate to charity, it will seriously affect the lives of economically vulnerable people who count on nonprofit groups to provide a safety net for themselves and their families.
The nonprofit sector is a critical component of the U.S. economy that deserves to be protected. The Urban Institute projects that nonprofits generate more than $1 trillion every year through jobs and services, including employing 10 percent of the workforce. And according to Giving USA, individuals donated nearly $300 billion to charitable causes in 2011. It is also important to state the obvious—since the onset of the Great Recession, many nonprofits have been asked to do more with less. If the charitable deduction is reduced and the government simultaneously continues to cut back the services it provides, all of us worry about the deep and long-term consequences that will impact our communities.
It was in this context that I, along with other colleagues from the sector, met with many members of our congressional delegation and their staff, sharing stories of how the charitable deduction positively impacts nonprofits. Since Pride Foundation works across five Northwest states, I was able to meet with the Chiefs of Staff for Sen. Baucus and Sen. John Tester (D-Montana) as well as Sen. Tester himself, along with his Senior Economic Advisor. I also met with Sen. Patty Murray (D-Washington) and her staff, Sen. Maria Cantwell (D-Washington), and a legislative assistant for Sen. Mike Crapo (R-Idaho). Many of us also had the chance to meet with the Chief Tax Counsel to the U.S. Senate Committee on Finance, who is gathering input and feedback from various constituencies who will likely be impacted by tax reform.
During these meetings, we emphasized how community groups are continuing to find innovative solutions to long-standing challenges, filling voids created by government cutbacks, and providing critical and essential services in our communities. We discussed how the charitable tax deduction is unique among all other deductions because it does not solely benefit the individual taxpayer – it provides essential financial support to every nonprofit in this country; we should be creating more incentives for people to give, not fewer.
One of the highlights of the trip for me was when Sen. Tester stopped by on his way to the Senate Floor to vote on the Continuing Resolution. A few of us were meeting with his Senior Economic Advisor, Alison O’Donnell. When I introduced myself, he immediately recognized Pride Foundation’s name, and said that he knew of our good work and appreciated all that we were doing.
I am grateful for the time the Senators and their staff gave to us as well as their willingness to listen to our hopes for further strengthening the philanthropic and nonprofit sectors in our region. I walked away with a strong sense that the Northwest is blessed to have such a respected and powerful congressional delegation.