Guest post by Kelley M. Gilbert, Director of Government Relations, Big Brothers Big Sisters of America

Over 100 nonprofit leaders gathered in San Francisco to discuss the impact of comprehensive tax reform on the nonprofit sector and the communities they serve at Independent Sector's Public Policy Action Institute (PPAI). Central to the discussion was the need to develop a tax structure that supports charitable organizations - upon which millions of Americans rely for vital programs and services – while simultaneously increasing our nation’s revenue.

When Congress returns to Capitol Hill next week, legislators will begin to address these end-of-year fiscal issues. The non-partisan Congressional Budget Office estimates that America will reach a "fiscal cliff" -- a double-whammy of tax hikes and spending cuts if comprehensive tax reform is not reached by January 1, 2013. As a whole, PPAI attendees firmly believed Congress and the White House must come to an agreement on tax reform that increases revenue while protecting charitable giving.

President Obama's Fiscal Year 2013 Budget proposes an extension of 2001/2003 tax cuts for families earning $250,000 or less, yet proposes to cap all itemized deductions at 28 percent for high-income taxpayers. If the charitable deduction is capped, reduced or eliminated, low-income Americans who rely upon charitable services and programs will be most affected. "The charitable deduction encourages individuals to give away a portion of their income to those in need.  It encourages taxpayers to invest in their communities in whatever diverse way they choose," said panelist Sue Santa of The Philanthropy Roundtable. 

This fight in Washington, D.C. is not just about extending the Bush era tax cuts; it involves ensuring that every person in America pays their fair share of taxes to ensure the economy moves forward and to protect the safety-net of the American economy – the work of nonprofits. "It is critical for nonprofits to have their boots on the ground in Washington, D.C. Most legislators presume the constituency affected by limits on the charitable deduction is high-income earners. Ultimately, the constituency is those served by the nonprofit sector," said Heather Noonan, League of American Orchestras. Charities bridge the gap in the absence of robust federal funding for socials services by serving those in need. If giving decreases, the nonprofit sector is harmed as well as those in the lowest income brackets.

Tax policy expert Nick Giordano of Ernst & Young stressed the importance of the nonprofit sector identifying a tax-reform wish list to bring to the table during discussions. PPAI participants overwhelmingly identified the desire to leverage public and private dollars to solve problems of low-income Americans, and protect tax benefits that help low- and middle-income Americans, such as the Earned Income Tax Credit and Child and Dependent Care Credit.

To ensure your voice is heard during the charitable deduction debate, join the Charitable Giving Coalition December 4-5, 2012 for Protect Giving – DC Days. Participants will meet with members of Congress to encourage them to preserve the charitable deduction.