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Arts Advocacy Day 2011
TAX REFORM
ENCOURAGING GIFTS TO SUPPORT THE ARTS & HUMANITIES IN OUR COMMUNITIES
ACTION NEEDED
We urge Congress to:
•
 
Preserve incentives for charitable giving, including tax deductibility and the IRA Rollover; and
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Reject attempts to create a hierarchy of deductions to nonprofits that discriminates against arts andculture by reducing tax deductibility of charitable gifts.
BACKGROUND
ON THE COMMUNITY VALUE OF THE NONPROFIT ARTS
 
There are approximately 1.4 million 501(c)(3) organizations, including arts organizations, hospitals, privateschools, religious congregations, public television and radio stations, soup kitchens, and foundations. These typesof nonprofit organizations must benefit the broad public interest. In recognition of this service, Congress hasprovided that contributions made to 501(c)(3) nonprofits are tax-deductible.As the momentum for tax reform increases and the federal deficit mounts, there have been proposals to curtail oreliminate the income tax deduction for gifts to 501(c)(3) organizations, including the nonprofit arts. Such proposalsare short-sighted and are often made on the basis of false assumptions. Congress should fully understand the impactof proposed tax reform on incentives for charitable giving and should protect giving incentives that support thevaluable community services provided by the nonprofit arts sector.The arts contribute to communities in myriad ways, including:
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Communicating across religious, ethnic, and political divides, both at home and abroad;
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Attracting businesses, investment, and entrepreneurs;
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Creating a skilled, creative, and innovative workforce;
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Exploring civic issues, both current and past;
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Creating human and social services programs focusing on healthcare, addiction, senior services, and manyother areas;
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Providing in-school and afterschool programs for children and teachers, as well as lifelong learning for all;
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Preserving our heritage and making it accessible to all who wish to participate; and
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Adding immeasurably to the quality of life in our communities through vibrant artistry.
MYTHS ABOUT CHARITABLE GIVING
MYTH:
 
Donors will not reduce giving if charitable tax deduction laws are changed.
REALITY:
History has shown that donors do respond to tax law changes by altering what, when, and how muchthey give. To cite one example, in 1986, the Tax Reform Act restricted the deductibility of gifts of property. Insucceeding years, gifts of securities, real estate, and art plummeted, in some cases by 90 percent. Congressgradually restored deductibility as the evidence mounted that it had unintentionally harmed the ability of land trusts,universities, hospitals, schools, and museums to fulfill their missions of service to communities. Congress fullyrestored the deduction in 1993.
MYTH:
 
Donors with higher incomes “benefit” more from tax deductions and therefore it is a matter of equity toreduce this “benefit.”
REALITY:
When people give, they are reducing their own wealth in order to make a nonprofit service availableto the public. Whether the money in question goes to the government in the form of taxes or a nonprofit in the formof a donation, it is helping to benefit the public. The American public has proven time and again that a vitalnonprofit sector is worthy of support.
MYTH:
The arts do not serve communities broadly, or worse, that they mainly serve “the rich.”
REALITY:
Nonprofit arts organizations attract donations from people across the economic spectrum, includingunderserved populations. More important, they serve people and organizations across their communities.
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