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Charitable Giving Incentives Limited by Maine Legislature

by Brenda Peluso

During the late session budget negotiations, the legislature instituted a cap on all itemized deductions including the charitable giving deduction.  This effort to raise revenues without raising taxes outright could cost the nonprofit sector and the communities we serve much more than the revenue it will produce for the treasury.

This cap on all itemized deductions, including the mortgage interest deduction and the charitable giving deduction, was set at $27,500 for individuals or couples and is retroactive to January 2, 2013.   We are concerned that this may have an impact on fall fundraising, particularly for large donors and capital campaigns.   For donors who have already given above this cap for this year, this may be surprising news for them.

While tax deductions are not the only motivator for giving, they do facilitate larger and more gifts.   At this time of increased demands on nonprofit services and decreased resources to meet those demands, we should be increasing this important incentive instead of limiting it.

MANP is interested in hearing your perspective.   Feel free to comment on this article with your thoughts on any of the following questions:

  • What this cap will mean for your fundraising efforts?
  • Should Maine follow suit of other states and carve the charitable giving deduction out of the overall itemized deduction cap?
  • How important is the charitable giving deduction to giving in Maine?
  • Should Maine adopt a giving incentive for the almost 70% of Maine taxpayers who do not itemize on their taxes?

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