Giving to Caeser that which is God’s…
We need a new strategy and dozens of new supporters if RHM is going to survive as a viable ministry after changes that are in place, which will take effect in 2011.
Probably unknown to most, there is a crack in the tax code provisions that protect the deduction against income for charitable contributions that help RHM and other not for profit organizations to raise funds and survive.
In 2001 the passage of the Economic Growth and Tax Relief Reconciliation Act was passed to cut taxes. You know this as the “Bush Tax Cuts.” Among the provisions in this bill was an item called the Pease Limit, named after Congressman Pease who proposed it. The Pease Limit protected the deduction given among itemized deductions for qualified gifts to charitable, not-for-profit organizations. In 2011, the Pease Limit reaches its sunset date; it will expire not to be renewed.
In anticipation of the sunset of charitable contribution deduction protection, the Obama Administration has proposed and Congress has passed, the 2010 Fiscal Year Budget. This imposes a limit on upper income contributors’ charitable contribution deductions. In 2011, if your income exceeds $250,000 your charitable contributions can be deducted at only 30% of the total value of your gifts. RHM does not receive many donations of $5,000, $10,000 or more. Our largest monthly contributors usually donate $5000 to $10,000 per year. However, I would guess that many of those people make $250,000 or more per year. I think that it is unquestionable that RHM will see a drop in donations from its largest supporters.
The seriously bad news is that the Obama Administration would like to see this become just the first step in the gradual phase-out of the Charitable Contribution Deduction at all income levels. Pray this never happens. Pray that some who are dedicated to our work may give without considering the deduction they receive, and that lower income level donors may not itemize deductions at all. However, this squeeze begins from the top income levels on those who help buy buildings, vans, and expensive medical equipment to perform ministry. Such a squeeze on Christian missions is coming from the IRS aimed at low-income levels too.
The second part of this new government mandate is just a little different from the first: A recent IRS Revenue Ruling makes taxable the income of non-profits who receive less than $25,000 in donations per year. These organizations could have escaped taxation by filing a new 990N form with the IRS by May 17. However, that deadline was not well advertised or noted by the small ministries and charitable organizations who individually do just some, but together accomplish much. Next year they will receive a nice tax bill on what they previously believed was safe.
We face unprecedented opposition to our faith from our general society, the media and entertainment, and government. Christian organizations that act as non-profits are being targeted because they have been successful in doing great works of mercy with large sums of money given by generous, good people. To the IRS and to the present Administration, this makes for an obvious source of new revenue in tough times.