INDEPENDENT SECTOR Statement on Charitable Giving Package Compromise Legislation

2/7/2002

From: Carla Bundy or Patricia Nash, 202-467-6100, both of Independent Sector Web site: http://www.IndependentSector.org

WASHINGTON, Feb. 7 -- The following is a statement by President and CEO of INDEPENDENT SECTOR Sara E. Melendez on Charitable Giving Package Compromise Legislation:

The CARE Act (Charity Aid, Recovery, and Empowerment Act) of 2002 will provide important incentives to all Americans to expand their generosity and increase giving at a time when many nonprofits are experiencing the effects of the downturn in the economy.

INDEPENDENT SECTOR, a coalition of more than 700 national nonprofit organizations, foundations and philanthropy programs applauds the work of the White House and Senators Joseph Lieberman (D-Conn.) and Rick Santorum (R-Pa.) to achieve a compromise that encourages giving and offers aid to America's charities and nonprofit organizations. We are pleased the nonitemizer deduction, the IRA charitable rollover provision and the reduction of the excise tax on assets of private foundations are major components of the compromise legislation.

The nonitemizer deduction would give the 86 million taxpayers who do not itemize their tax returns recognition for their giving. The IRA charitable rollover will expand the generosity of millions, and the excise tax will enable private foundations to increase their grant support to charities.

In times of economic uncertainty, charities realize they must do more. Despite an outpouring of donations to nonprofits, many organizations, like many people, are hurting. Indeed, our research indicates that while Americans want to be generous, financial considerations may cause them to reduce or stop their giving.

INDEPENDENT SECTOR recognizes that under the current economic climate, it may be necessary to enact these provisions for a shorter time period. We are convinced that this giving package will provide a powerful incentive for Americans to give more in the short term, and we in the charitable community will work to demonstrate the power of these incentives in the long run. We look forward to working with the White House and the Congress to pass this important legislation.

--- FACT SHEET: Giving In America

-- Nearly nine in ten (89 percent) American families give charitable contributions. (Source: Independent Sector)

-- 86 million taxfilers-or more than two-thirds of all filers-do not itemize their taxes. (Source: IRS)

-- Regardless of their income level, taxpayers who receive a deduction for their charitable contributions give substantially more to charity than those who do not receive a deduction. (Source: Independent Sector analysis of IRS data)

-- The average annual amount contributed per tax return for itemizers who give was $2,861 in 1998, compared to the average given by contributing nonitemizers of $340. (Source: Source: Independent Sector analysis of IRS data)

-- History indicates that enabling all givers to claim a charitable deduction stimulates giving. In 1986, when the tax code allowed nonitemizers to claim a deduction for the full amount of their charitable gifts, charitable contributions by nonitemizers increased by 40 percent or $4 billion from the previous year. (Source: Independent Sector analysis of IRS data)

-- If passed, the nonitemizer deduction included in the Charity Aid, Recovery, and Empowerment Act of 2002 would likely stimulate at least $1.15 of charitable giving for every $1.00 it costs. In addition, it will likely inspire new donors to start giving. (Source: Independent Sector estimates)

-- Americans report that being asked to give makes a substantial difference in the size of their gifts. Fully 44 percent of households were not asked to contribute, indicating untapped potential to increase giving. A charitable gifts line item on income tax forms will be a powerful reminder that giving is important. (Source: Independent Sector)

-- Households in which the respondent reported being "worried about having enough money in the future" gave approximately 50 percent of what households without worries gave. (Source: Independent Sector)

-- 44 percent of charities report experiencing shortfalls in funds raised after September 11 when compared to their fundraising efforts the previous year. (Source: Association of Fundraising Professionals)

-- More than half (58 percent) gave money to charities in response to the terrorist attacks in the four weeks just after September 11. (Source: Wirthlin Worldwide survey for Independent Sector)

-- Half of Americans say they will reduce or stop their giving if the economy worsens. (Source: Wirthlin Worldwide survey for Independent Sector)

-- Total private giving reached $203.45 billion in 2000, with 83 percent of gifts from individuals. (Source: Giving USA, AAFRC Trust for Philanthropy)

------ Independent Sector is a nonprofit, nonpartisan coalition of more than 700 national organizations, foundations, and corporate philanthropy programs, collectively representing tens of thousands of charitable groups in every state across the nation. Its mission is to promote, strengthen, and advance the nonprofit and philanthropic community to foster private initiative for the public good.