NEW YORK — The largest American Jewish philanthropic umbrella welcomed the fiscal cliff deal passed by Congress on Tuesday night, saying it protected the nation’s welfare safety net and would not hurt charitable contributions to American philanthropies.
In a statement Wednesday, the Jewish Federations of North America welcomed the agreement as a “positive move that not only delays scheduled cuts but also extends unemployment insurance benefits for the millions that rely on these programs.”
While the deal was celebrated by Democrats as preventing “a tax hike on 98 percent of Americans and 97 percent of small businesses,” JFNA and similar nationwide charities were more worried about the consequences of a potential deal on the poor and vulnerable.
Together with other major charities, JFNA had expressed concern in recent weeks that a deal that sought to close the budget deficit by cutting programs for the most vulnerable and scaling back charitable deductions that encourage philanthropic giving would “disproportionately” hurt the poorest Americans.
“Spending cuts should not unfairly target the most vulnerable among us, whose [lives] are dependent on critical assistance programs, and tax policy should encourage charitable giving, especially during times of economic distress,” said William Daroff, vice president for public policy of JFNA. “As demands on nonprofits continue to grow, we must ensure that the tax code continues to promote giving and enables charities to meet the rising demand for critical community-based services.”
In the statement, the group noted that “the ability of donors to deduct contributions to charity from their taxes is a cornerstone of America’s charitable tradition, and an indispensable source of funding for social service agencies that provide vital alternatives to direct government programs.
“In addition to providing for those in need, nonprofits create jobs and leverage economic activity. Nonprofits account for 5 percent of GDP, 9 percent of the economy’s wages and nearly 10 percent of the nation’s jobs. Barriers that limit charitable giving only hinder this critical nonprofit sector,” the statement argued.
JFNA represents over 150 local Jewish communal charities that provide well over $2 billion in funding to social services and education each year, primarily in the United States and Canada.
“We know the fiscal debate isn’t over,” cautioned JFNA board chair Michael Siegal.
“As the fiscal debate moves forward, JFNA continues to urge Congress and the Administration to protect the charitable tax deduction that is so vital to the work of the nation’s leading charities and to ensure that any spending decisions don’t devastate the nation’s safety net,” the group said.