ROCKFORD (WIFR) – The Community Foundation announced today that the charitable provisions provided in the “fiscal cliff” legislation are good news for the nonprofit community. Community foundations and the entire nonprofit sector have been active over the past month working with elected officials to preserve the deduction for charitable gifts in the fiscal cliff negotiations waging in our nation's capital.
In the bill that ultimately passed on January 1, 2013, the charitable deduction will continue to be coupled with an individual's or household's corresponding tax rate. In other words, there is no cap on charitable deductions.
The bill extends the IRA charitable rollover through December 31, 2013. This provision permits tax-free distributions to an eligible charity from an IRA held by someone age 70½ or older of up to $100,000 per taxpayer, per taxable year.*
This is good news for Americans who make charitable contributions, but even better news for children and families who seek services from nonprofit organizations.
A study conducted by United Way Worldwide in November, 2012 showed 30% of Americans would reduce their giving levels without charitable giving tax incentives. The charitable deduction is used by people of varying income levels, not just high income individuals.
“The nonprofit sector is vitally important to our community and to the state of Illinois,” said Gloria Lundin, President of the Community Foundation of Northern Illinois. “Illinois nonprofits employ over 425,000 people throughout the state, contribute to the economy of each county, and pay workers more than $16.5 billion annually. It is important that we are aware that nonprofits reduce the social burden on government, delivering services directly and efficiently to those in need.”
The Community Foundation encourages donors to support area nonprofits. One easy way is to establish a permanent donor-advised fund at the Foundation. Donor-advised funds allow donors to support charitable programs and projects each year in perpetuity.
The Community Foundation of Northern Illinois is the region’s largest provider of grants and scholarships. Founded in 1953, its mission is to attract, grow, and preserve a permanent endowment for the people of Northern Illinois.