Monterey, CA Fiscal Cliff Deal Bad News For Hands To Help Seniors, Other Non-Profits

View From A Non-Profit Serving Carmel, Carmel Valley, Gonzalez, Greenfield, King City, Marina, Monterey, Pacific Grove, Pebble Beach, Salinas, Seaside And Soledad California

Non-profits were dealt a devastating blow by the last-minute dealings in Washington D.C. yesterday to try and prevent the country from going off of the so-called fiscal cliff.  As part of the legislation which was passed, tax deductions (including those for mortgage interest and charitable giving) will be phased out up to 80% in 2013 for single persons earning over $250,000 and couples earning over $300,000.  Although this sounds like a lot of money, much of the cash given to charities comes from donors which are in the highest income tax bracket.  Those with the most money can most afford to give the most, but the U.S. government is now discouraging this by reducing tax deductions like charitable giving.  The move was a surprise to many, including myself.  I expected the tax rates to increase on higher income individuals and couples but I thought the mortgage interest and charitable deductions were sacrosanct.  It's too bad that this deal was done at the last minute.  If it would have been done just a few days earlier, the wealthy would have had an incentive to increase year-end giving.  Former White House Secretary Ari Fleischer came out in the press today saying he will give less money to charity now there are limits on tax breaks for charitable giving.  "The President is sending mixed messages to the charitable community," Sue Santa, senior vice president of the Philanthropy Roundtable said earlier this year. "On one hand, he wants to limit the charitable deduction. On the other, he wants millionaires to continue to give to charity while also paying higher taxes."   According to the Philanthropy News Digest, the cap on tax deductions could deter giving by as much as $7 billion this year. This is an extremely tough environment in which to raise money.  I thank all of you that participated in our Monterey Gives program which ended on New Years Eve.  We raised $7,855.00, not including the matching funds which will come in.  Thanks again!

Please note that this blog reflects my personal opinion and may or may not reflect the opinion of Hands To Help Seniors and the individual members comprising the Board of Governors.