JFNA Testifies at Congressional Hearing to Protect Charitable Tax Deduction

Any effort to curb tax deductions for charitable contributions would “cripple” charities and hurt the needy they serve, according to William Daroff, vice president for Public Policy at The Jewish Federations of North America (JFNA). Daroff made the comment during testimony he presented to the House Committee on Ways and Means as part of its continuing deliberations on comprehensive tax reform. The charitable tax deduction is essential to ensure that charities are able to raise the funds necessary to help the vulnerable among us, Daroff maintained.

The Ways and Means Committee invited Daroff to testify at its hearing on Tax Reform and Charitable Contributions. Its leadership said it wants to “hear directly from the charitable community” before considering any proposals that might affect that community’s ability to “obtain the resources they need to fulfill their mission.”

Jewish Federations form the second largest philanthropic network in the nation, collectively raising almost $1 billion in annual giving, as well as an additional $1.2 billion annually in planned giving and endowments.

In unequivocal terms, Daroff told members the impact of limits on the deduction would be significant. Donors’ contributions are the “lifeblood” of the Jewish Federation system and “essential for us to fulfill our charitable mission,” Daroff said. Proposals to limit the deductibility of charitable contributions would result in “less giving and therefore cripple charities that strive to remain at the forefront of the fight to feed the hungry, clothe the naked and heal the sick.”

William Daroff, JFNA VP of Public Policy

While citing studies that show a potential loss of $3 billion in charitable contributions from changing the deduction, Daroff called the debate by tax economists “largely an academic exercise.” The true measure of the impact, he said, “is the tens of thousands who benefit from our services every day.” When government programs such as Medicaid are operating at a loss, philanthropic dollars are what keep the doors open, he added. 

Daroff singled out for special mention the importance of protecting donor-advised funds and supporting organizations, known as participatory funds, which encourage family philanthropy and build endowment assets. He called on the committee to allow these funds to flourish “with a minimum of regulatory burdens” as it considers changes in the charitable deduction.

The JFNA system raises and allocates funds for almost 1,000 affiliated agencies that provide critical services to almost 1 million people across the country. JFNA also “inspires members of the Jewish community to fulfill our religious duty to be charitable (tzedakah) and to fulfill our collective responsibility to build community and improve the world (tikkun olam)," Daroff told the Committee.

The JFNA office in Washington, D.C., has been a leader in advocating for the protection of charitable tax deductions since proposals first were discussed to limit them in 2009.