Thursday, August 1, 2013

"The charitable tax deduction works." - John Ashmen

In 1917, Congress created the charitable tax deduction in an effort to provide support to the many non-profits and charitable organizations bearing the burden of "social welfare." The Mission, founded in 1911 and registered as a non-profit in the late 1940s, is one of the qualifying charities that benefits from this provision. With current economic woes still sending shock waves through our economy and recent revelations regarding the Internal Revenue Service, a current congressional committee is toying with the idea of rewriting the tax code by "starting with a clean slate," one that could possibly wipe out the charitable tax deduction.

In a recent response to an op Ed piece in the Wall Street Journal, several non-profit association leaders reiterated the importance of independent non-profit organizations for providing much needed services. John Ashman, president of the Association of Gospel Rescue Mission, joined his voice to this group and highlighted very important information about the role of non-profits in America.

Per his words, "For every $1 a donor deducts, $3 are returned to communities in the form of services and support." This means that for every $1 of revenue that the government returns to the tax payer (not a credit but a deduction toward what they "owe"), $3 are used to meet needs within that community. A $10 deduction, for example, is a return investment of $30 to women, children, and men in need.

In contrast to the "clean slate" approach, another recent report, published by USA Today, found that "Americans by more than 2-1 say the best way to make positive changes in society is through volunteer organizations and charities, not by being active in government." (Susan Page, USA TODAY).

To read the whole Wall Street Journal article, click here.

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