The Association for Healthcare Philanthropy opposes a proposal in President Barack Obama's budget that would impose new limits on charitable tax deductions.
The AHP said it approves of the president’s overall efforts to revive the economy, reform healthcare, revise energy policy and tackle other important issues affecting the country. However, officials said, the budget contains a proposal that sends the wrong message at the wrong time to those who support charitable causes.
“It puts forward a scheme that would effectively devalue charitable gifts made by the very people who are in a position to make substantial donations at a time when they are sorely needed,” the AHP said.
For those who earn more than $250,000, the proposal would limit the federal tax deduction they may take for their generosity to 28 percent. Currently, they may claim up to a 35 percent deduction.
An Indiana University report suggests that "had these proposals been in place in 2006, total itemized charitable giving by households would have dropped by 2.1 percent.” And that number fails to take into account the current large decline in America’s personal wealth. Americans’ generosity in support of nonprofit hospitals and healthcare systems is substantial, totaling $8.35 billion last year, according to the AHP’s "Report on Giving 2007."
A study released in September 2008 by John Volpe, Ph.D., a professor at the University of Maryland's University College, “In Economic Cycles and Charitable Giving," concludes that a slowing of the growth in the Gross Domestic Product and disposable personal income, as well as uncertainty over the economy, are likely to contribute to weakness in charitable giving through 2009.
According to the American Hospital Association's November 2008 Report on the Economic Crisis, the capital crunch is making it difficult and expensive for hospitals to finance facility and technology needs. The AHP Report on Giving indicates that more than 45 percent of charitable giving was used to upgrade infrastructure, including often long-overdue construction and renovation projects and equipment purchases.
AHP officials said the steep decline in personal wealth, especially if coupled with proposed limitations on tax deductions, makes the outlook for philanthropy over the next 18-24 months bleak. “For philanthropy to continue to fulfill its role in the American healthcare system, this is not the time to drastically change standards for fundraising,” the organization said.