Letters: Should the Charitable Deduction Be Modified?

Connect With Us on Twitter

For Op-Ed, follow @nytopinion and to hear from the editorial page editor, Andrew Rosenthal, follow @andyrNYT.

To the Editor:

Prof. Ray D. Madoff ("How the Government Gives," Op-Ed, Dec. 6) characterizes many charitable deductions as "wasteful." Yet for people in communities across the country who rely on nonprofit services every day, the charitable deduction is a lifeline. Charitable and philanthropic organizations employ millions, provide a variety of valuable services that might otherwise not be offered, and contribute to economic growth.

Professor Madoff offers the vexing criticism that some nonprofits are more "charitable" than others. The idea that policy makers might rank organizations' charitable value raises many complex questions. For example, how would policy makers or tax regulators determine who would deserve the benefit of the deduction or which organizations' purposes were "charitable"?

Our charitable sector thrives because donors get to choose to donate their money to diverse causes. Some choose children's health. Others choose support for military families. Still others choose community theater groups. Philanthropy should remain an independent investment — free of politics or favoritism.

Professor Madoff also criticizes donor-advised funds, saying they "don't do any charitable work themselves." This view is shortsighted. These funds enable donors to make sustained, strategic investments in their communities.

Now more than ever, we must encourage — not place harmful restrictions or make arbitrary value judgments on — charitable giving.

VIKKI SPRUILL
President and Chief Executive
The Council on Foundations
Arlington, Va., Dec. 12, 2013

To the Editor:

Ray D. Madoff argues convincingly that Congress should curtail opportunities for charitable deductions that have little public benefit. What must also be reformed is the right of itemizers to claim a charitable deduction for small contributions.

For example, taxpayers who have made large mortgage interest payments and state and local tax payments will itemize their deductions, which allows them to claim a charitable deduction for every dollar they contribute, even if they contribute relatively little. On the other hand, the two-thirds of all households that don't itemize cannot claim any charitable deduction, even if they give a relatively significant percentage of their income.

The fairest solution is to allow all taxpayers to claim a charitable deduction, but only for gifts in excess of a basic dollar threshold — such as $1,000 — and in excess of a certain percentage of their income. For example, in 1963, President John F. Kennedy proposed that no itemized deductions should be allowed except those in excess of 5 percent of a taxpayer's income.

If the charitable deduction were available to everyone but only for gifts above reasonable thresholds, it would encourage and reward truly charitable giving by all Americans.