Earle Mack recently testified in front of the House Committee on Ways and Means Hearing on Tax Reform and Charitable Deductions in support of charitable deductions. The full testimony is available here but here are some relevant quotes.
Good morning, and thank you for the opportunity to speak to this distinguished committee. My name is Earle Mack and I live in Florida. It has been my distinct honor and privilege to serve the nation as American Ambassador to Finland from 2004-2005, and I have been involved as a leader of many non-profit organizations. I am Chairman Emeritus of the New York State Council on the Arts and of the Benjamin N. Cardozo Law School. I was also cochairman and board member of the Dance Theater of Harlem and spent many years on the board of the New York City Ballet. I am also a former member of the New York Governor’s Committee on Scholastic Achievement. But I am here today as a private citizen, someone who has been fortunate enough to be able to give millions of dollars to charity over the years. And I am here to tell you that if the charitable deduction is reduced or capped, I, and people like me, won’t be giving as much as
we do now. It’s not that we donate to charities of all kinds because of the deduction; we give where we see the need because it’s the right thing to do. But it’s inherent to human nature that we usually need a gentle tap, to make it at least somewhat in our own selfinterest to do the right thing.
You can take my word for that, but you don’t have to. At least one study, reported in the October 2, 2011 Chronicle of Philanthropy bears me out. One conclusion reached by two professors who published the study in June of that year was this: “. . . all else being equal, if the tax savings for giving another dollar to charity goes up one cent, donors will increase their contributions by a bit more than 1 percent. And they will trim their giving by a similar amount if their tax savings fall. Put another way: If a donor gets a 35-percent tax break for her gift, she will donate about 35 percent more than she would have with no tax incentive.”
Earle Mack continued, discussing why this is an issue in our society.
Consequently, these non- profits that perform vital services to our community and maintain our culture, our heritage, our education system, our hospitals, our scientific research, and our religious institutions are going to get the short end. In fact Independent Sector reports that without the deduction, annual giving is expected to drop by as much as 36 percent; and estimates are that a cap would cost charities as much as $7 billion a year and force cuts in their budgets
of twice that amount because of their conservative nature. Please don’t take away those incentives that make our country great.
Doing so will have a disastrous effect on the non-profits and religious institutions that are so vital in our society in their outreach to helping the poor, the homeless, the mentally ill, and troubled kids.
Ambassador Earle Mack also complimented our current system, explaining why it makes us unique.
The U.S. is boldly unique among developed countries in having its cultural, educational, scientific and religious institutions supported not primarily by the government but by philanthropic largess. That was why the tax deduction for charitable contributions was created in the first place – very soon after the income tax itself was enacted early in the 20th Century. And it worked brilliantly. More than in any other country in the world, Americans understand that making our communities healthier and stronger is a partnership between the private sector and government, and that they, as citizens belong to both groups.