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Score: 1 Potential Win to 1 Potential Loss

Submitted by Geoff Peters, CEO, CDR Fundraising Group

First the Win …

As reported in the inaugural edition of P&L news – the Florida Legislature with the encouragement of the states’ top charity regulator, Florida Commissioner of Agriculture and Consumer Services Adam Putnam, introduced “reform” legislation (Senate bill 638 and House bill 629) that missed the point of some local scandals and would have created some significant compliance problems for charities and fundraisers across the nation.

DMAW members, including staff representatives of Florida based Wounded Warrior Project and other charities, worked with Association of Direct Response Fundraising Counsel (ADRFCO) representative Robert Tigner, and contacted key supporters of the proposed legislation and the office of Commissioner Putnam to express their concerns. 

The legislators expressed surprise that legitimate charities would have any concerns until some of the problems with the legislation were explained to them! To their credit, because they really don’t understand how fundraisers and charities operate, they listened and agreed to modify certain portions of the bills under consideration.

While the final product is not perfect and the legislation continues to attempt to exercise jurisdiction over out-of-state fundraisers, contrary to a decision of the 11th Circuit Court of Appeals in a Florida case (http://www.ca11.uscourts.gov/opinions/ops/199910945.MAN.pdf), it is clearly better than the bill as originally introduced and nearly passed without such input.

Through the support of its members, DMAW’s voice was heard!

* * *

The Potential Loss of $9.4 Billion…The loss will be realized if we are not diligent.

Both the White House and Congress continue to come up with tax “reform” schemes that will hurt charitable giving. President Obama has proposed in every proposed budget for the past six years to place a cap on the charitable deduction for higher income earners even though it is clear that less than 50% (and often substantially less) of such gifts are compensated for by any tax advantage.

House Ways and Means Committee Chairman Dave Camp (R-MI) has proposed a 2% floor on the charitable deduction – meaning that one can only deduct gifts totaling in excess of 2% of their Adjusted Gross Income. Other changes proposed include percentage caps on deductions. But why senior government officials would want to discourage such generosity is befuddling.

One can only assume that some in the government believe that receiving additional taxes amounting to approximately 33% of what these individuals would have otherwise given to charity would allow the government to accomplish its goals (such as helping the poor) better than a charity could accomplish with the full 100%. The estimated decline in charitable giving is as much as $9.4 Billion. Both charities and the government have overhead costs but often with the help of volunteers, many in the charitable community would argue that charities (such as churches) are much more (maybe twice!) effective in helping the poor than is the government. Do the math. 33% for a program that is ½ as effective vs. 100% for a program that works. Go figure.

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