Obama Plan Would Reduce Charitable Deduction for Some Wealthy Donors
February 26, 2009 By Suzanne Perry
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By paying the alternative minimum tax rate of 28 percent, those wealthy taxpayers are already restricted to the same percentage on their charitable deductions, Mr. Sharpe said. “A lot of the rich are already used to the 28-percent deduction,” which means the Obama proposal would not result in any change for them.
Impact on Large Institutions
Bruce Flessner, a fund-raising consultant at Bentz Whaley Flessner, in Minneapolis, says the plan would likely have little impact on organizations that have a broad base of donors. But large institutions — particularly colleges and universities and academic medical centers — could be particularly hard hit if the plan moves forward.
“It seems like unusual public policy to try, as the President announced to the Congress this week, to return the United States to world leadership in access to higher education and then make it more difficult for extraordinary donors to contribute great gifts to colleges and universities,” Mr. Flessner said. “Likewise, it seems like unusual public policy to penalize the great medical centers that contribute so much to scientific breakthroughs by making it more difficult for donors to make the six-, seven-, eight-, and nine-figure gifts.”
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