Bush’s Budget: Key Items of Interest to Charities

President Bush’s economic plan contains numerous provisions that would affect nonprofit groups, including a proposal to establish a Federal Compassion Capital Fund to help needy Americans.

In an address to a joint session of Congress last week, the president outlined his budget proposal for the next fiscal year.

Mr. Bush told Congress that he would promote legislation to create new tax incentives to encourage charitable giving.

“We must encourage and support the work of charities and faith-based and community groups that offer help and love, one person at a time,” President Bush said.

He added: “These groups are working in every neighborhood in America, to fight homelessness and addiction and domestic violence, to provide a hot meal or a mentor or a safe haven for our children.”

Full details of Mr. Bush’s budget plan for fiscal 2002 will not be available until the administration releases its full spending plan soon.

But the budget outline, released by the White House as the president’s plan was sent to Congress, provides the basic blueprint of President Bush’s proposals.

The plan is available online at http://w3.access.gpo.gov/usbudget.

Here are some of the key elements:

Would keep National Endowment for the Arts and National Endowment for the Humanities spending at current levels of about $100-million each.

Would continue Community Development Block Grant financing at current levels and expand the number of jurisdictions receiving assistance to house people with AIDS.

Would provide more than $700-million over the next decade to establish a Federal Compassion Capital Fund to help needy Americans. The fund would have, in Mr. Bush’s words, “a focused and noble mission: to provide a mentor to the more than one million children with a parent in prison and to support other local efforts to fight illiteracy, teen-age pregnancy, drug addiction, and other difficult problems.”

A related fund would support and promote research on “best practices” among charities.

Would provide $23.1-billion to the National Institutes of Health, an increase of $2.8-billion over the current fiscal year, the largest annual dollar increase in the institutes’ history. Would provide the National Science Foundation with $4.5-billion, a $56-million increase from the current year.

Would maintain current spending for the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) to cover aid to 7.25 million people a month. Would also maintain current spending of $329-million for the Legal Services Corporation.

• Would allow people who do not itemize deductions on their federal income-tax returns to write off charitable gifts. Estimated cost to the Treasury: $482-million in 2002; $15.6-billion over five years; $52.2-billion over 10 years.
• Would allow donors over age 59 to give money to charity directly from their individual retirement accounts without incurring taxes. Estimated cost: $53-million in 2002; $864-million over five years; $2.3-billion over 10 years.
• Would increase the annual limit on charitable deductions taken by corporations from 10 percent to 15 percent of a company’s taxable income. Estimated cost: $85-million in 2002; $649-million over five years; $1.6-billion over 10 years.
• Would gradually phase out estate taxes at an estimated cost of $266.6-billion over 10 years.

Would provide $733-million for the Corporation for National Service, which would cover:

• The AmeriCorps national-service program to support 50,000 members, the same number of people as this year.
• $203-million for the National Senior Service Corps, a $14-million increase over the current budget. The proposal says this money marks the first step of the president’s plan to increase annual spending on the Senior Corps to $250-million over five years.
• $20-million to create a Silver Scholarship program to allow older people to volunteer 500 hours tutoring and guiding youngsters in after-school programs in exchange for a $1,000 scholarship that could be deposited in an education savings account for use by the volunteers’ children, grandchildren, or another child.
• Would provide $15-million for a new Veterans Mission for Youth program that would provide grants to community groups that connect veterans and military personnel with young people through mentor, tutoring, after-school, and other programs.