Oklahoma nonprofits fear funding losses

Local nonprofits fear efforts to reduce government spending could result in decreased funding and reduced services — right when people need them the most.
by Ken Raymond Published: January 20, 2013
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Marnie Taylor is all for balancing budgets in Washington.

She just doesn't want it to come at the expense of nonprofits. She and others in the local nonprofit community are worried that charitable deductions may be reduced or eliminated as part of the ongoing effort to reduce the federal deficit.

“Go back to (the economic collapse of) 2008,” said Taylor, president and chief executive of the Oklahoma Center for Nonprofits. “Oklahoma didn't take as deep a decline as other states or the country did, but people had less money to give. Some people who used to be givers had to become takers of some charitable help.

“That's exactly what we're looking at now. Funding cuts that are undefined in Washington could end up in great cuts around a lot of social service programs, creating a greater need and at the same time cutting off the incentive for people to give more. It's a big, horrible circle.”

Earlier this month, in the aftermath of the fiscal cliff negotiations, the Oklahoma Alliance of Nonprofits sent out an email highlighting three areas of concern.

While the charitable giving deductions were “largely untouched” by the fiscal cliff legislation, the Clinton-era limit on itemized deductions was restored. This reduces “itemized deduction, including charitable deductions, by three percent of adjusted gross income” for individuals earning $250,000 or more and couples earning $300,000 or more.

Income tax rates won't go up for most Oklahomans, but the temporary payroll tax break expired, so everyone is seeing two percent less money in their paychecks. Singles earning $400,000 or more and couples earning $450,000 or more have had their tax rate increase from 35 percent to 39.6 percent.

Perhaps most significantly, charitable deductions could go on the chopping block multiple times early this year. The current debt ceiling negotiations provide one such opportunity; two others — the postponed sequestration and the expiration of the stopgap Continuing Resolution federal spending bill — will arrive in March.

The biggest worry is that charitable deductions could be eliminated entirely. Even if they aren't, further reductions in the amount donors can write off could cause contributions to drop precipitously.

“In our state, there is a big push to reduce taxes,” said Ray Bitsche Jr., executive director of Sunbeam Family Services. “At the federal level, there is a big push to get our financial house in order, to live within our means, to reduce our deficit. At the same time, if you reduce or eliminate the charitable deduction, you're just reducing the dollars that fund some really valuable and successful programs.

“I will speak for myself. I make an ongoing pledge to my church. That's where most of my giving goes. I make a contribution to the United Way, and then I make charitable contributions to several other nonprofits in town whose work I value. I will always put my pledge to my church first, and I suspect others will do the same. So (if write-offs are reduced or eliminated) it really hurts the nonprofit agencies.”

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by Ken Raymond
Book Editor
Ken Raymond is the book editor. He joined The Oklahoman in 1999. He has won dozens of state, regional and national writing awards. Three times he has been named the state's "overall best" writer by the Society of Professional Journalists. In...
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