TWIN FALLS, Idaho (KMVT/KSVT) Nonprofits across the nation and in Idaho are worried about how the new tax plan could affect them.
Last week the Idaho Nonprofit Center put out a press release about their concerns.
“H.R. 1, as currently written in both the House and the Senate, would be devastating for Idaho’s communities,” said Amy Little, CEO of the Idaho Nonprofit Center in the release.
Little laid out several concerns. Among them was an increase in taxes and cuts to safety-net programs to nonprofits to make up for a deficit in the federal budget. The Idaho Nonprofit Center believes that could mean more than 87 percent of the Gem State’s nonprofits would receive significant cuts in their funding.
Another big concern of theirs is incentives for charitable giving going away.
“Not only are we going to see a sharp decrease in federal funding for mission fulfillment, but now nonprofits will struggle to raise funds to make up the difference without the charitable giving incentive,” Little said.
The Idaho Council of Nonprofits says both the House and Senate Bills would increase the standard deduction for individuals to $12,000 or more, for couples to $24,000 or more, and heads of households to $18,000 or more.
The council believes that is a bar out of reach for 95 percent of taxpayers to donate and write off on an itemized tax form. They predict that if the bills were enacted as written, charitable giving to nonprofits would shrink by more than $13 billion each year.
“To have this huge hit, it would just be devastating to so many, especially the smaller nonprofits,” said Bill Mikranz, the president and CEO of the Magic Valley United Way.
To combat this, United Way chapters across the country have pleaded with lawmakers not to make those changes.
“We’re all rallying around it, talking to local senators, signing whatever we can to oppose what they’re trying to do,” Mikranz said.
Mikranz fears the worst for some of the charities, saying organizations trying to better their community simply couldn’t overcome funding cuts and donation decreases. He thinks many would close their programs.
Valley House, a Twin Falls shelter and nonprofit, fears that too.
“I think this is the worst thing that could happen to our nonprofits as it would cause services to diminish and many doors to close,” said Sharon Breshears, the executive director of Valley House in a written statement to KMVT. “Faithful donors rely upon their financial and in kind donations to be tax deduction. This would not only hurt the people we serve, but all those helping our nonprofits.”
The Idaho Nonprofit Center has another worry. They believe wording in the tax bills has the potential to inject politics into work of nonprofits.
“Nonprofits may also find it challenging to keep the public’s trust if they are pressured to endorse one candidate for office over another instead of focusing on their missions,” Little said.
Both the House and Senate have passed tax reform bills. The National Council of Nonprofits says the House one is worse for them, but the Senate one is also bad. They point at the main difference being the provision in the House bill that they say would politicize houses of worship, charitable nonprofits and foundation.