Wednesday, July 29, 2009

Charitable Donations - Who Will Keep Giving ?

United Jewish Communities differed with President Obama when they were quoted last spring as saying: “During the current economic downturn, which has forced nonprofits to do more with less, any proposal which would result in a decrease in private giving will be a disaster for America’s charities, and for those who depend upon them.” Specifically this umbrella organization for Jewish service charities is concerned that changes in the benefits donors currently receive will impact negatively on giving. Families in the 33% and 35% and making over $250,000 would only receive benefits currently enjoyed by those in the 28% bracket. In real numbers this means a reduction of taxes of $28,000 for every $100,000 donated instead of $35,000. Or to put it another way if a collector has paid more than $28,000 for a donated object that is appraised for $100,000, then he or she is losing money. While these changes wouldn't take effect until 2011 many non-profits are already getting hammered by reduced support due to the economic downturn. Previous blog entries have cited numerous institutions that have made significant staff cuts, delayed projects, cancelled projects, and generally tried to do more with less. Ironically President Obama has enjoyed significant support in the arts community in the past. These new measures could, regardless of an economic rebound ensure that funding problems continue far beyond any good news in general for the economy. With other proposed programs aimed at seeking additional taxes from the wealthy many non-profit fund raisers are nervous. Considering that many collectors who still have money are staying on the sidelines with many dealers and auction house reporting anywhere from 20 to 40 percent reduction in sales, it is logical to assume that the sidelines might be a bit more crowded for the next several years when it comes to giving as well.

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