From Feeding America: Update on Congressional Proposals to Change the Charitable Tax Deduction and Nonprofit Mailing Rate

As Congress continues to develop broad ranging deficit reduction measures, multiple legislative vehicles have emerged that could significantly impact the ability of Feeding America network members to raise funds, most notably limiting the charitable tax deductions for high income tax payers and increasing the postage rates for non-profit mail.  Feeding America has been and will continue to be actively engaged in fighting these efforts.   Please read below to learn what you can do to help.
The first proposal, capping deductions for high income taxpayers at the 28% tax bracket, is being debated in the larger context of the  Select Committee on Deficit Reduction’s charge to enact at least $1.2 trillion in deficit reduction.   Efforts to limit deductions for high income taxpayers, which would include the charitable tax deduction as well as other deductions, are part of this larger discussion.  Limitations on the charitable tax deduction were included in the President’s last three budget proposals, as well as in his JOBS Act recently submitted to Congress.  
The second proposal is a provision in the Postal Reform Act sponsored by Congressman Darrell Issa (R-CA), Chair of the House Oversight and Government Reform Committee that would raise the nonprofit postal rate over the next six years. Section 403 of the legislation would reduce the current discount rate for nonprofit postage by 5% each year for the next 6 years. Once the rate increase is fully phased in,  the current discount rate will be reduced from 40% to 10% by 2018.  While Representative Issa made changes during the Committee markup of the legislation on October 13 that would mitigate the impact of the changes, Feeding America is concerned that any limitation on the nonprofit mailing rate remains detrimental to the long term ability of nonprofits to communicate with donors. Similar legislation has also been proposed by Senator John McCain (R-AZ) in the Senate.
Feeding America has been  meeting with key Members of Congress to communicate the harmful impact these issues would have on our network and the nonprofit community.  Our strategy is to combine our voice with other nonprofits currently working on this issue to demonstrate a broad coalition of support while educating Members of Congress about how these issues would specifically impact our network as part of the “Perfect Storm” narrative facing food banks. Our most recent advocacy activity is detailed below:

• Feeding America has been lobbying the House Ways and Means and Senate Finance Committees with other leaders in the non-profit community.
• We signed on to a letter with Independent Sector (an organization representing leading non-profits that is heavily engaged on these issues) and 125 other nonprofit organizations urging the President and Congress not to put a cap on charitable deductions for certain income brackets.  A copy of the letter can be found here.  Feeding America also signed on to a companion ad that Independent Sector ran in Politico on July 18.  A copy of the ad can be found here.
• Feeding America is part of  a national grassroots campaign to protect the charitable tax deduction organized by the National Council of Nonprofits.  You can read more about the National Council of Nonprofits efforts here.
• In addition, Vicki Escarra and members of the Feeding America policy staff have raised this issue in numerous meetings with Members of Congress and staff and will continue to include it as one of our key legislative messages.
• On October 13 Feeding America held a  tele-town hall for network members located in the states and districts of House Ways and Means and Senate Finance Committee members, as well as members of the Special Committee on Deficit Reduction on the impact capping the charitable tax deduction will have. These Committees have jurisdiction over tax policy issues and are our top legislative targets on this issue. To view the presentation from the call click here.
• Feeding America is working with Independent Sector and other nonprofit organizations to communicate the significant negative impact any changes to the nonprofit postal rate would have on fundraising efforts. This includes letters Feeding America sent to Representative Issa and Senator McCain on November 1. (here and here)
• Feeding America submitted testimony for the record in response to an October 18 hearing held by the Senate Finance Committee to examine Options for Charitable Tax Reform. A copy of the testimony can be found here.

What can you do to help?

• Sign on to the Independent Sector and National Council of Nonprofits campaigns to let Congress and the President know they must make no changes to the charitable giving incentive that threaten the ability of nonprofit organizations to continue to serve the needs of individuals and communities.
  • To sign on to the Independent Sector letter, click here. 
  • To sign on to the National Council of Nonprofits grassroots campaign, click here. This letter is scheduled to be sent to Congressional Leadership this Monday, so sign up today.
• Send a letter to your Congressional members letting them know how important protecting the charitable tax deduction is to the work your food bank is doing.
  • To find out more about the issue, including sample talking points and to send a letter to your Member of Congress, click here.
• Send a letter to your Congressional member and Representative Issa letting them know how detrimental increases in the nonprofit postal rate would be to the work your food bank is doing.
  • To find out more about the issue, including sample talking points and to send a letter to your Member of Congress, click here.

If you have any questions about this issue, please do not hesitate to contact Carrie Calvert in the DC Office of Feeding America at ccalvert@feedingamerica.org.