Federations ask Congress: Defend charity deductions

The NJ State Association of Jewish Federations endorsed a national effort by nonprofits to ensure income tax deductions for charitable contributions.

As a member of the Center for Non-Profits, the association backed a letter sent by the center’s executive director to Rep. Bill Pascrell (NJ D-Dist. 9), a member of the House Ways and Means Committee.

Congress is debating Obama administration proposals for tax reform that would include a ceiling on the amounts taxpayers may deduct for such donations. Nonprofits worry that it will reduce a key incentive for philanthropic giving.

“Nonprofit organizations are significant employers and purchasers, pumping billions of dollars into New Jersey’s economy every year,” the letter reads, using an economic argument. “Nonprofits employ nearly 10 percent of New Jersey’s private workforce, generating payroll and income taxes, and helping to reduce public assistance and unemployment rolls.”

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William Daroff, vice president for public policy for the national Jewish Federations of North America, testified on Feb. 14 before the Ways and Means Subcommittee on Oversight. He said cutting back on such tax deductions “would cripple charities and hurt the needy they serve.”

Jacob Toporek, State Association executive director, agreed with Daroff. “We want to make sure we protect these tax deductions at all costs,” he told NJ Jewish News in Feb. 13 phone interview. “My feeling is that President Obama has for the last few years included a reduction in his budget messages. I get the feeling it is going to happen again.

“We helped fight on that and we were fortunate before — and I think we will be successful again this year — but the administration will definitely put it on the table. So we just have to keep at it, year in, year out,” Toporek said.

Daroff, one of 42 witnesses to appear before the committee, testified that the nation’s 150 Jewish federations form “the second-largest philanthropic network in North America.”

Daroff — who is also director of JFNA’s Washington office — argued that “tax incentives do result in increased charitable giving” and any limits on them would “cripple our ability to provide needed social services to the most vulnerable among us.”

“At a time when government funding at all levels is shrinking, charities are needed to fill the gap that government cannot address,” he said.

Daroff acknowledged that the Jewish values of tzedaka, or philanthropy, and tikun olam, or social action, “transcend the tax code,” but, he added, tax deductions “lead to increased donations.”