So, we are gearing up for one of our annual events at work. It's called 'A Vintage Affair'. It is a most fun weekend event where we bring in 40 to 50 vintners from Napa Valley for a wine tasting event.
There is a fun, intimate patron party on Thursday were some of the best vintners will serve their wines at the home of one of the events biggest patrons.
Then, on Friday, there will be an extravagant Gala held in a hangar at Wiley Post Airport. The hangar is transformed into something spectacular, and the silent and live auction is always highly entertaining, and a great source of revenue for our small, but mighty non-profit organization. There are several tables of 10, each with their own vintner and the remarkable wines from fabulous wineries.
The event closes on Saturday evening with the All-City tasting party. Individual tickets are sold at $60 each (a steal for as much wine and food there is to sample) and the vintners gladly showcase their best wines and about 20 to 30 restaurants from around town will serve samples of their best dishes. It's a fantastic event that raises loads of funds.
We are starting to receive several reservations for the event and tickets to the All-City Tasting are flying out the door. We sent a formal invitation to most everyone in our database, and have been getting an excellent response.
The reply cards are supposed to list the name of the guests who will be attending the event. As I was reading the responses we received in the mail, I was amused by what was written on one of the cards. See for your self.
If everyone were to feel the same way about giving to charitable organizations, sooner than later, most would have to shut their doors. What this tells me is that this person doesn't give out of the goodness of their heart, but rather for the tax deduction.
I researched exactly what Obama's plan was for tax deductions for charitable giving and this is what I found:
CURRENTLY, A TAXPAYER is entitled to "deduct" from his or her taxable income donations made to government-approved charitable organizations. This deduction is applied at the highest marginal rate that she pays. So if she's in the highest tax bracket and pays the Internal Revenue Service 35 percent of the highest portion of her income, she can effectively write off - and not pay - 35% of her contributions.
For example, if she makes a $5,000 donation to her local museum, she will pay $1,750 (35% of $5,000) less in taxes. (The so-called Alternative Minimum Tax complicates the analysis a bit.) President Obama's proposed budget, however, aims to do two things. First, it will increase the highest marginal rate from 35% to nearly 40% for couples earning more than $250,000 yearly. Second, it will cap the charitable deduction at a 28% rate. So, essentially, the same woman paying taxes at a marginal 35% rate will only be able to deduct 28% of her contribution; the same $5,000 gift would yield a tax savings of only $1,400. Thus, families in higher tax brackets will not only see their marginal rates increase but will also see a reduction in the deductability of their donations.
16 comments:
Excellent post. Very well-written. I knew a little about this, but had never seen the situation explained so clearly.
I think its crappy that people see events like this as a tax deduction rather than a great event to help raise money for a great organization. If I made $250K a year, you can bet your sweet ass I would buy a ticket and not worry about 28% versus 35%. (Which I believe is about a $350 difference) It is the materialism that has brought us to this place and time in America. We need to get back to what is right in America and stinking thinking like this will just keep us on the same path! Say you cant go because you lost your job, then I am with you but to say you cant go because your tax deduction will be of a lesser percentage makes me nautious......Christi
My guess is this provision will get changed/cut from the final bill that passes . . . there's been a lot of comment about the problems with this issue in relation to charities & non-profits. Regardless, the event sounds like a hell of a lot of fun. On another subject, pull for NC this weekend for me as if NC wins, then I think I win my bracket tournament.
Several of my best clients are private non-profits for whom I provide grant-writing assistance. Without major, six figure donations from individuals and corporate foundations, these organizations would not be able to do the important, in-the-trenches work that helps the needy and underserved in their respective communities. So we're all very unhappy over this. Christi has a point. To a point. But this will make a BIG difference to the organizations and individuals who give six figures or more. Add this to all the other taxes and penalties they pay for the sin of being wealthy and productive, and something's going to give. And that, unfortunately, just might be "giving."
Kim, great post. Moi, you really hit at the core of the matter. I'm not trying to pick a fight with Christi but I do think she misses what Kim is saying here. The person who responded with the card might be going to an extreme, but the fact that people who make lots of money are also the biggest contributors to charities shows how wrong this provision is. Also, Repub's give more money to charities than Dem's at by over 50%, so form your own opinion from there.
Chef: Thanks. The article I found had loads of other good tid-bits, I'll see if I can find it again.
Christi - I get what you are saying, but what about those donors who give $1million? 35% is 350,000 and they can only claim 28% that is a difference of $20k. That is some serious dough to lose out on. And with the big campaign we are working on, we have to seriously consider the opportunity might just slip away because who is going to give that significant amount of money, then not be able to claim 7% of what they should be able too. I just did that math. The difference between the 35% and the 28% comes out to $3.5million. Ouch. Anyway - LY's reaction was priceless. Priceless, I tell you!
$2 - I certainly hope it does get dropped... we've already seen a drastic drop in annual donations just because the economy is in the crapper. We don't need people to stop giving all together. The event will be a blast, and very intoxicating! It will physically make me ill if I pull for UNC. I hope they win so you can win your bracket. But I'm going to root for Michigan State. That butt-whoopin they put on Louisville was impressive.
Moi - I am so glad that there are other supporters of NPO's who are in our corner. Mine is a one of a kind, not another like it in the country, and we are literally making life healthier for Oklahoma's children. I don't want to think about the consequences if it were to disappear. But I’m so glad to know that you free lance grant writing! That is my JOB. In addition to event productions, and database administrator! I may hit you up for some feedback sometime!
Milk - I think the person who responded to the card (it came anonymously by the way) is a selfish man, who probably was stingy with his money anyway. And who friggin gives the Queen of England an iPod? How embarrassing.
Kim, can you imagine if GWB or any Republican would have greeted the queen in the same way as President Teleprompter did? Narcissism defined. BTW, I didn't put a team in the Final Four. Blast.
Mr. Boxer was ranting about this just the other night and I said "well, where's the proof this will happen?" and then I come here and see;
PROOF.
It won't change the way we donate however, because unlike some people, I actually care more about why I donate over the tax deduction I may (or may not) get for it.
Nice post and I didn't know you worked for a non-profit. That's great.
That's pretty dang lame, sister. Sorry to hear that. People suck. Which non-profit are you with?
One of the gifts of being wealthy is that you can give back.....if you get any deduction for that then you should be happy. There is no percentage for how that donation makes you feel and ultimately that should be the reason you give.
Milky - I think that if GWB were to give the Queen an iPod, we all would have been shocked that he was hip! And too bad about the final 4. I got 1 and that 1 I don't have going to the finals. scheesch. It was wishful thinking for my Sooners to make it there anyway... but hey, the OU women made it to the final 4!
Boxer - I bet if you were to talk to some of your local NPO's they'd tell you that they've seen a decline in donation dollars. It's a sad, sad truth.
Heather - It is lame-o. What is most insulting is that they PAID the POSTAGE to have the return card sent back to us. Just to rub it in. Geeze - just don't donate dude!
I work for Children's Medical Research Institute. In a nutshell, we raise money for Research and Education Endowments for some pediatricians at Children's Hospital at OU Medical Center. It's pretty amazing what this little NPO has achieved. Check us out at www.cmri.net
Christi - I agree that the reason for giving should matter more than getting a tax break. It's just a cold reality that for some people, it's all about getting their name in the paper. I liked your rant about it at your blog today. Sorry to get you fired up. You're my little fire cracker. I mad you pop! xoxo.
Christi is myopic and dopey.
Christi sings like a ... professional angel though and we heart her very much!!!! Who else would sing Lady Marmalade to warm up a wedding, eh??? :)
Thanks Pam! I only did that for Kymmers! I disagree with Chef Troll in the fact that I am myopic. I feel that the narrow minded individual is the person who wrote the postcard, but that is what is so great about American, everyone can have an opinion!! Here is to freedom of speech....Christi
At least for now we do! But seriously, it is a change, but not a total do-away-with-it thing. Surely some percentage is better than no percentage???
Senate keeps charitable deductions
Washington Times, by Stephen Dinan Original Article
Posted By: Photoonist- 4/4/2009 5:43:34 PM Post Reply
The Senate on Thursday voted unanimously to preserve the full charitable-giving deduction in the tax code, rejecting yet another key part of President Obama's strategy for paying for the ambitious spending programs in his 2010 budget. ''The Senate sent a clear message to the president that we do not support increasing taxes on charitable contributions to try to cover the costs of health care reform,'' said Sen. Robert F. Bennett
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