February 10, 2017


Whenever budgets get tight, policymakers often look for opportunities to trim expenses and close loop holes before looking at new revenue opportunities. One favorite tactic is turning to the charitable deduction as a possible source of revenue. NAO is a strong believer in the phrase coined by our own Senator Ron Wyden that "the charitable deduction is a lifeline, not a loop hole." Countless studies and articles (here is one from just days ago) agree that capping or curtailing the charitable deduction has adverse effects on giving and hurts communities.

At the Federal Level: President Trump has already stated he intends to push through sweeping tax reform. Some of his advisors have hinted at a non-itemized tax deduction, which could be a great initiative if done smartly. In other statements, President Trump has talked about capping the charitable deduction on itemizers, which would have terrible effects on larger charitable gifts. What we know is that the U.S. Congress and the Trump Administration are expected to take up federal tax reform in earnest beginning in February. Charitable giving incentives, notably the charitable deduction, are going to be re-evaluated and likely altered during the review process.

Like Independent Sector and the National Council of Nonprofits, NAO is supportive of an expansion of the charitable deduction and the creation of a non-itemized deduction for charitable gifts.

2017 marks the 100-year anniversary of the charitable deduction and it's time to unlock its full potential for the charitable sector and the communities we serve. Wouldn't it be great if every Oregonian and every American had an incentive to engage in charitable giving by a federal tax code that extends the charitable deduction to all taxpayers, regardless of their itemizer status? We'll continue to bring you updates.

At the State Level: We were happy to see that there were no bills put forward in the current Oregon legislative session that explicitly cap or curtail the charitable deduction, and one bill - SB600 - sponsored by Senator Tim Knopp (R - District 27) that creates a personal income tax credit! We are hopeful that previous attempts to cap the charitable deduction in Oregon have been dropped. We do know that there are multiple bills that have been submitted that relate "to state financial administration; declaring an emergency" and that "Appropriates moneys from General Fund to _____ for biennial expenses."

NAO will work with colleagues to keep an eye on these bills as they may be the vehicle later in the sessions for language that threatens Oregon's charitable deduction.