20 Jun Let’s Keep Community Giving Strong
Local businesses play a pivotal role in supporting initiatives that improve the lives of their neighbors. Their contributions fund programs and facilities that strengthen the social fabric of rural towns across northern Indiana.
One recent example stands out; RapidView LLC donated the former Schnabeltier property to The Outlet Youth Center in Rochester, providing a permanent home for youth programming in Fulton County. That gift included more than 10,000 square feet of usable space, more than two acres of land, and donated furnishings and equipment. It was an incredible act of generosity that will benefit young people for years to come.
Proposed changes in federal tax policy could make contributions like this less common. The House-passed reconciliation bill includes a provision that would limit corporate charitable deductions to only the amount exceeding one percent of a corporation’s taxable income. For large companies, that may not be an issue. But for smaller or mid-sized businesses, the ones most embedded in our communities, it could be a disincentive.
According to the Joint Committee on Taxation, the official nonpartisan body that estimates the cost of legislation, this change would generate $16.6 billion in revenue over ten years. That money does not come from profits. It comes from reduced charitable giving.
We have seen this dynamic before. When Congress let the universal charitable deduction for non-itemizing individuals expire, giving dropped. Estimates suggest that contributions from those donors declined by as much as $17 billion per year. Removing tax incentives for giving, whether from individuals or corporations, has real consequences. It can mean fewer dollars for youth services, fewer local partnerships, and fewer opportunities to build the kind of community we all want to live in.
We are encouraged that lawmakers are reconsidering a charitable deduction for non-itemizers in the current bill. That is a step in the right direction. A broader proposal, known as the CHARITABLE Act, would go even further and could help restore the kind of giving we saw when the universal deduction was in place.
Policies should make it easier, not harder, for generous people and businesses to give back. Philanthropy works when the barriers are low and the impact is local. Let us make sure our tax laws support that, because communities like ours depend on it.
Written by Hannah Bahney
Program Director
Northern Indiana Community Foundation
574.223.2225