CHARLESTON, W.Va. -- Ongoing discussions by political leaders in Washington, D.C., about how to avoid the "fiscal cliff" could lead to cutting tax deductions for charitable contributions.
Some proposals could affect the future of a variety of institutions, including colleges and universities, nonprofit hospitals, arts centers, churches, recreation centers, food banks and homeless shelters.
Ben Beakes, the University of Charleston's vice president for university development, said Friday, "We in the nonprofit world are very concerned about the elimination of charitable deductions.
"At the University of Charleston, we depend heavily on private donations to run the school, fund scholarships and execute capital projects.
"Since 2003, we have raised about $85 million from private donations. Those donations are a huge part of what we do. We fear that reducing charitable deductions would have a serious negative effect at the University of Charleston," Beakes said.
John M. Ballengee, president of the United Way of Central West Virginia, said, "While taking away those deductions could in fact save the country a lot of money, it probably would take away from local contributions.
"In a lot of cases, people making those contributions are in the middle class. I think people in the upper class may continue to give. People in the middle class give because it is the right thing to do, but [eliminating their tax deductions] would probably hurt.
"There are other opportunities we could look at. We need to do something. But it kind of drives me nuts to see what is going on in Congress," Ballengee said.
The Rev. Jeff Allen, executive director of the West Virginia Council of Churches, said, "The general thought is that this would not hurt day-to-day giving. But it will probably hurt when a family, or a person, comes into some extra money.
"If a person wants to donate some of that to a church, but cannot get a tax benefit, it might make that person think twice," Allen said. "It could hurt the work of organizations like the United Methodist Foundation and mission projects funded by churches."
Gail Pitchford, president of the Charleston Area Medical Center Foundation, a nonprofit group, said, "I think people give from the heart. They don't give just because of a tax deduction. But it is an added benefit to a gift.
"I think many charities will suffer. I think people will hesitate. They will not give as much," Pitchford said. "I think particularly about smaller charities, like a nonprofit charity of one or two people trying to feed the homeless. Small charities are the ones I am really concerned about."
'No area for experimentation'
President Obama has proposed limiting the amount wealthy people can write off to 28 percent of their taxable income, down from the current 35 percent.
On Oct. 18, two leaders of nonprofit organizations told the Senate Finance Committee that proposal could also devastate many charities, according to "The Chronicle of Philanthropy," a bi-weekly publication based in Washington, D.C.
Brian Gallagher, president of United Way Worldwide, told the Finance Committee that a recent study estimated Obama's proposal would cut charitable donations between $2.9 billion and $5.6 billion a year.
"That equates to eliminating all of the private donations each year to the Red Cross, Goodwill, the YMCA, Habitat for Humanity, the Boys and Girls Clubs, Catholic Charities and the American Cancer Society combined," Gallagher said.
Dallin H. Oaks, a former president of Brigham Young University, said the ability of people to deduct charitable donations on their income tax filings is vital to the financial health of charities, especially charities that attract millions of volunteers to help people in need.