Sen. Orrin Hatch, R-Utah, the Finance Committee's ranking Republican, said, "There has been a charitable deduction in the tax code for nearly a century, and the proposals on the table would undo it. This is not the area for experimentation by the federal government."
Judy Wellington, president and CEO of the Clay Center in Charleston, said, "Those tax deductions were put in because the government values what the nonprofit arena does. Those deductions were one of the ways government could support it. I believe we are still doing good work.
"We receive quite a bit of funding from the general public. I hate making predictions, but we have a really loyal donor base. Because of that, and because they feel we are serving the public, particularly in the education area, I expect they will continue to support us," Wellington said.
Jean Simpson, who runs Manna Meal at St. John's Episcopal Church in Charleston, praised the state's "neighborhood investment program" which now gives special state tax credits for up to $3 million in charitable donations.
Charities around the state fight to be part of the program, Simpson said.
"For every $500 people give us, we can give them a $250 tax credit from the state," Simpson said. "The first year I did that I got $22,000 in extra money, because I could give them back $11,000."
Simpson said, "It doesn't make any sense for the federal government to cut back on tax deductions. The government will just have to produce more money to take care of these people."
Earlier this month, the White House's National Economic Council released a report - "The Charitable Deduction and the Fiscal Cliff" - looking at problems that could be created by cutting the ability of taxpayers to claim charitable deductions.
Proposals to cap current income tax deductions are trying to generate "hundreds of billions of dollars of revenue from drastically cutting or eliminating the charitable deduction."
Legislative proposals putting caps on income-tax deductions, the National Economic Council warns, would threaten future donations to colleges and universities, nonprofit hospitals, social service providers, art institutions and other philanthropic groups.
For example, if the government put a $25,000 "cap" on itemized deductions, "millions of households would effectively lose their entire charitable deduction, since their other deductions (mostly state and local taxes and mortgage interest) already exceed the cap.
Under a $25,000 cap, 13 million households would lose their entire charitable deductions according to the council's report. Under a $50,000 cap, 3 million households would.
Creating a $25,000 cap, the council predicts, would reduce charitable giving by $200 billion over the next 10 years.
Under Obama's current proposal, the report pointed out, "the 98 percent of households with incomes below $250,000 ($200,000 for singles) would get exactly the same tax benefit for charitable giving as they do today. They would also get to keep all their other tax benefits."
Beakes said the University of Charleston is asking its "donors to think about making a larger contribution by the end of the year because of the uncertainty about what tax deductions will be next year.
"Every 501(c)3 nonprofit that depends heavily on nonprofit contributions will be affected by this.
"A major reason we raise money is to keep costs down for our students. We will depend even more heavily on private donations to do that in the future."
Reach Paul J. Nyden at pjny...@wvgazette.com or 304-348-5164.