Tax reform and its potential impact on charities has been a point of discussion for some time now. In many ways, it seems those in the nonprofit sector view the options as being to keep the charitable deduction or eliminate it entirely. Realistically, though, most proposals that affect the deduction for charitable donations represent a middle ground. The current approach by the Senate Finance Committee is to accumulate a laundry list of possible alternatives to eventually winnow down, with the hope of reaching a consensus. The list of proposals examined thus far by the Senate Finance Committee is summarized here.
Presuming the goal of reform is to raise tax revenue and simplify enforcement while maintaining incentives for charitable giving, several of these proposals are worthy of consideration. As I've discussed before, I'm particularly interested in proposals to close the loophole for donations of appreciated property – if that is not low hanging fruit, I don't know what is.
However, before getting to an in depth discussion of the possible avenues for reform, one additional thing may be worthy of consideration -- an expansion of the Pease Amendment. Not only has that not been mentioned, but the Pease amendment is discussed in the Senate Finance Committee's list only as something to be eliminated. So, why do I think an expansion is worth considering?