Federal tax reform proposals could further pinch budgets of Delaware nonprofits

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Just a few months after state budget cuts led to cutbacks at Delaware nonprofit agencies, more concerns are brewing as details of federal tax reform initiatives come to light.

A parent organization of the Delaware Alliance for Nonprofit Advancement, the National Council of Nonprofits, reviewed the reform bills that were introduced in the House and Senate.  DANA President and CEO Sheila Bravo said HR 1 as currently written in the House and Senate “would be devastating for Delaware’s communities.”

DANA is concerned that individuals would be discouraged from giving if a 100-year-old charitable gift tax incentive is repealed. Organizations  that are currently tax-exempt may also lose that exemption to fund tax cuts. Some of these agencies feed the hungry. Others help shelter the homeless. Still others perform a variety of functions that serve the community.

“They do rely on the generosity of the community to support them, because they were created by the community,” Bravo said.

DANA and NCN also contend that repeal of the Johnson Amendment, which kept nonprofits from supporting or opposing political candidates, opens up the nonprofit community to the influence of partisan politics.

“At a time here in Delaware where we’re really finding the nonprofit community that often is doing the work on behalf of government and government funding is less, they really rely on individuals giving to the nonprofits so they can continue to serve their mission,” Bravo said.

by: Mark Fowser, Reporter/Anchor, WDEL