Preserving Charity Tax Breaks Won’t Be Main Goal of Nonprofit Coalition

Independent Sector, a coalition of nonprofits and foundations that has waged a vigorous campaign against proposals to limit the charitable deduction for wealthy people, has now decided to devote more attention to other aspects of budget and tax policy that could harm poor people.

Critics have accused Independent Sector and other nonprofit advocates of spending a disproportionate amount of energy protecting the charitable tax break, given other critical issues facing the nation, especially those affecting vulnerable people.

Diana Aviv, the group’s chief executive, said Independent Sector’s board “sympathized with that point of view.” It adopted a series of “guiding principles” last week, saying it plans to promote policies to cut the nation’s deficit and overhaul the tax code that do not “exacerbate income inequality or increase poverty.”

The principles, which were sent to the organization’s members today, also say deficit-reduction plans should include both tax increases and spending cuts, the tax code should remain progressive, and changes to entitlement programs like Social Security, Medicare, or Medicaid should not increase burdens on those “least able to care for themselves.”

What’s more, it says, “those who can most afford to contribute more should be asked to do so.”

President Obama has proposed numerous times limiting the charitable deduction for people earning at least $200,000 (for couples, $250,000) as way to raise money for federal coffers, a move nonprofit leaders have warned would dampen giving.

Ms. Aviv said her board, which had struggled a long time to fine-tune the new principles, wants the organization to continue speaking out about the charitable-giving incentive since “that’s our bread and butter.”

However, she said, “if we only deal with the charitable deduction and don’t place it against the backdrop of much larger issues that we should focus on as well, we would be remiss in our responsibilities.”

The new principles say that the tax break for charitable donations should be preserved or modified only in ways that strengthen incentives to give and “respect the freedom of individuals to determine the causes and organizations they participate in and support, and treat those choices equitably.”

The statement about freedom is designed to show how the group will respond if policy makers, for example, propose giving a bigger tax break for gifts that help low-income people than for those going to wealthy institutions like universities—an idea that has been floated several times in the past two decades.

Ms. Aviv said Independent Sector would emphasize the issues outlined in the new principles in its dealings with Congress and the White House.

In his most recent comments on the issue, President Obama said in his State of the Union address last month that he wanted wealthy people to pay at least 30 percent of their income in federal taxes but that his plan would not disadvantage big donors.

Send an email to Suzanne Perry.