If you’ve ever been involved with a tax-exempt, nonprofit organization, you know that the day begins and ends with one word: money.

Because you’re not in the business of making it, your only alternative is to raise it.

It’s a heavy lift even in the best of times. And thanks to the Republican-driven tax “reform” legislation now hurtling through Congress like a runaway freight train, these are far from the best of times.

“Overall, it’s pretty scary to us,” said Jennifer Burns Gray, director of advocacy and public relations for the Maine Association of Nonprofits, in an interview Wednesday. “Folks are feeling very anxious.”

Why? Because the tax proposals both in the House and Senate could well throw a wet blanket on charitable giving here in Maine and beyond.

And as charitable giving goes, so goes what made America great long before Donald Trump moved into the White House.


Let’s start with tax deductions.

Under the current federal tax code, donations to a bona fide charitable nonprofit, or 501(c)(3) in tax parlance, can be subtracted from taxable income by people who itemize their deductions.

Here in Maine, itemizers comprise about one-third of the population. These folks donate to their favorite causes with the expectation that when tax time comes the following April, their taxable income will be that much lower and thus they’ll pay less in income taxes.

In other words, by rewarding them for their contribution to making the world a better place, the tax code actually encourages them to give more.

Not so under the House and Senate bills, both of which would raise the standard deduction and, in the process, drastically reduce the number of taxpayers who itemize.

It’s simple logic: No tax deduction means less incentive to donate, which in turn means less money for the local church, soup kitchen, youth group or myriad other organizations that strengthen our social fabric.


“On average, Mainers give about $700 (per capita) a year to charity,” noted the nonprofit association’s Gray. “While not all of those are itemizing, certainly many folks are incentivized by the itemized deduction.”

Gray doubts that those people, deprived of their tax break, would stop giving completely. Still, she said, evaporation of the charitable deduction would have a “depressive impact on giving.”

How depressive? According to the nonpartisan Tax Policy Center, the bill already approved by the House would shrink the number of American taxpayers who itemize their deductions from 46 million to 13 million.

In turn, the center projects, charitable giving nationwide would drop by somewhere between $12 billion and $20 billion.

This at a time when federal contracts with nonprofits to provide vital social services would also fast disappear via lost tax revenues. (It’s a foregone conclusion on Capitol Hill that whatever tax bill comes out of Congress, the federal budget deficit will balloon by $1.5 trillion between now and 2027.)

Thus, nonprofits get hit coming and going: Lost income, whether it’s from an individual donor or the state or federal budget, spells trouble ahead for a sector that employs one out of every six Mainers (more than any other industry) and contributes $11 billion annually to the state’s economy.


An easy solution, Gray noted, would be for Congress to pass a “universal deduction” that allows everyone to deduct their charitable contributions without itemizing.

That makes a lot of sense. Which, in the current political climate, makes it about as likely to happen as President Trump surrendering his Twitter account.

Now let’s turn to the other edge of the tax-reform sword.

Under the House bill, a 63-year-old prohibition against charitable nonprofits engaging in partisan politics would go up in smoke.

The so-called “Johnson amendment,” authored in 1954 by then-U.S. Sen. Lyndon Johnson, has for decades served as a bulwark against using charitable nonprofits as front organizations for hard-to-trace political contributions and other partisan shenanigans.

Why is that important?


Well, for starters, repealing it would drag the nonprofit sector kicking and screaming into the already-murky world of political financing. If you think it’s bad now, imagine a campaign pocketing massive cash infusions from, say, the Church of Freedom and Prosperity.

But equally distressing, from Gray’s perspective, is the corrosive effect repeal of the Johnson amendment would have on nonprofits’ credibility overall.

“A key part of our federal tax law is that nonprofits can’t engage in partisan politics,” Gray said, envisioning an explosion of “sham nonprofits that can just funnel money to partisan candidates and campaigns. It just would really damage the integrity of the (nonprofit) sector.”

And for what?

Because a president and his majority party – and that includes you, Sen. Susan Collins – desperate to demonstrate that they can achieve anything legislatively over the course of an entire year, are hell bent on doing in a few days what would take thoughtful leaders weeks if not months?

Because we all know that at the core of this tax-reform charade, the rich will get richer and the rest of us be damned?


Or is it because, to the politicians pulling the levers and the deep pockets who direct them, accumulated wealth is a virtue and nonprofits are for suckers?

The painful truth is that after all the drama and dysfunction of the past 12 months, we have arrived at a crossroads in this country: The turn Congress takes in the coming days will define this nation for years to come – not only to ourselves, but to a world that looks on in ever-escalating disbelief.

That sobering realization was not lost on a group of Maine clergy who gathered Tuesday morning in front of Portland’s Cathedral Church of St. Luke to decry the current tax proposals as “neither just nor moral.”

The Rev. Ben Shambaugh, dean of St. Luke’s, was among them, holding a sign that read “God Hates Greed.”

I chatted with Shambaugh on Wednesday. He said the plight faced by nonprofits these days is but one symptom of a political climate fueled more by avarice than an appreciation for what he calls the “common good.”

“I think we’re going through this spiritual poverty in our culture when you don’t give, when you don’t share,” Shambaugh said. “We’ve lost our moral compass.”


Bill Nemitz can be contacted at:

[email protected]

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