Alexis de Tocqueville observed, “I must say that I have seen Americans make a great deal of real sacrifices to the public welfare; and have noticed a hundred instances in which they hardly ever failed to lend a faithful support to one another.” When the pioneers settled Utah, it was what Tocqueville described as the “voluntary associations” that provided settlers the essential services they needed to thrive.
For example, the Relief Society of The Church of Jesus Christ of Latter-day Saints trained nurses and midwives, and at the same time helped Utah become first in the nation to see women vote. In the late 1800s, Catholic settlers and missions built and managed numerous hospitals and schools throughout Utah territory. The St. Mark’s Hospital (now located in Millcreek) was originally built in Salt Lake City by Episcopalian settlers in 1872.
Utah owes its early successes to these visionary “voluntary associations.”
Over time, our state’s “voluntary associations” became our nonprofits. Together, nonprofits provide a way for people to work together for the common good. We give shape to bold dreams, high ideals and noble causes. Together, we feed, heal, shelter, educate, inspire, enlighten and nurture people of every age, gender, race and socioeconomic status. We also foster civic engagement, train leaders, drive economic growth and strengthen the fabric of our communities — every single day.
During the ongoing COVID-19 pandemic, nonprofit organizations across the state are responding compassionately to this health crisis and heroically keeping our communities afloat. Yet, it is becoming clearer what impact the pandemic is having on our nonprofits. To our alarm, charitable giving dramatically dropped by 6% nationwide in the first quarter of 2020 (report by the Fundraising Effectiveness Project). To make matters worse, the Chronicle of Philanthropy predicts that giving could continue to sharply decline, with nonprofits losing out on as much as $25 billion by the end of the year.
The drop in charitable giving — caused by job losses and economic uncertainty — comes just as demand for help is skyrocketing. Sadly, this will undoubtedly result in more nonprofits closing their doors and many more left unable to meet the rising demand for their services.
Fortunately, there is a way to mitigate the pandemic’s economic toll on nonprofits. An above-the-line charitable tax deduction is a tool that allows taxpayers — who claim a standard deduction — to deduct a certain percentage or dollar amount from their taxable income from qualifying charitable contributions. Colorado has a deduction where $500 is first subtracted from a taxpayer’s qualifying charitable contributions, that then gives them their deduction amount. For every $1 in income tax revenue lost by the State of Colorado because of this deduction, nonprofits leverage $21 in giving. Similarly, Minnesota’s charitable tax deduction subtracts $500 from a taxpayer’s qualifying contributions, but then divides the remaining amount by half, to then give the taxpayer their deduction amount.
Lastly, the federal government passed a $300 above-the-line charitable deduction with the CARES Act for qualifying charitable contributions, with proposals from Sen. Mike Lee and others to expand it.
Above-the-line charitable tax deductions work. This deduction proposal not only benefits nonprofits, it also benefits communities and governments because nonprofits will have the resources to continue providing their much-needed essential services that boost economic recovery. Every organization, whether they are for-profit or not-for-profit, is needed now more than ever.
Kate Rubalcava is the chief executive officer of the Utah Nonprofits Assocation, a position she has held since January 2016. She serves as secretary and board member for the National Council of Nonprofits based in Washington, D.C., and also serves on the Alumni Leadership Council for Salt Lake Community College.