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Why Do Profit Organizations Offer Tax Deductions On Charitable Donations?

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The controversial debate about whether or not to offer tax deductions on charitable donations continues to resurface in popularity as leaders propose novel ideas. It’s a debate that takes into account fundamentally different charitable organizations, their size, and varying donor income. Choosing a size is often a matter of perspective. Nonetheless, a comprehensive analysis of this debate how much nonprofit organizations and society stand to lose with the end of tax deductions being offered to donor. This will especially concern the 66.4 percent of smaller registered charitable organizations whose combined expenses make up only 1.8 percent of the category, and generate less than $500,000 in expenses (McKeever). Thus, something has to be done …show more content…

In general, the problem with the nonprofit sector is not a questions of what types of nonprofits are being backed, but what size is receiving the most. Suzanne Perry, a Senior Editor at Chronicle of Philanthropy who specializes in nonprofit news cites a study done by the Institute of Jewish and Community “of more than 8000 donations of at least 1-million each made from 2001 to 2003” (Perry). In it, she writes that “44 percent of total dollars went to colleges and universities, followed by health and medical institutes (16 percent) and arts and culture groups (12 percent), while “social services received only 5 percent” (Perry). In other words, those social service organizations that go out of their way to help the desperate essentially get leftovers. More importantly, this goes to show that wealth charitable donors need to have a greater motive –higher tax deductions– for giving to the smaller and lesser known organizations, many of whom urgently need the extra donations to survive and fulfill their …show more content…

Such an event needs to be avoided at all costs. Diana Aviv, the former president of the Independent Sector, and the current Chief Executive Officer at Feeding America wrote that “some experts predict giving would decrease by as much as 78 billion per year” if no charitable deductions where offered (Aviv). To help put that statistic in perspective, 78 billion of total contributions in 2014 (358.38 billion) is equal to roughly 22 percent –a whopping fifth of the nonprofit sector (source). This significant decrease will impede smaller nonprofits in fulfilling their

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