The North Dakota Association of Nonprofit Organizations (NDANO) is opposed to two provisions of the Tax Cuts & Jobs Act (H.R. 1) passed by the House of Representatives because they significantly undermine the essential work of charitable nonprofits in North Dakota and across our country. These include:
• Section 5201, which eradicates the long tradition of nonpartisanship in 501(c)(3) nonprofits by drastically weakening the Johnson Amendment.
The charitable community in North Dakota is held in high esteem by the public because of its commitment to its missions and communities. Remaining nonpartisan – that is, not endorsing or contributing to candidates – enables organizations to address community challenges and invites the problem-solving skills of all residents, without the distraction of party labels. Thanks to current law, charitable nonprofits are safe havens from politics, places where people can come together to solve community problems and improve quality of life. Section 5201 weakens this safeguard for the entire charitable nonprofit sector. NDANO strongly believes the current law requiring charitable nonprofits – including foundations and houses of worship – to remain nonpartisan is the best way for 501(c)(3) organizations to advance their missions and work as partners with all levels of government.
• Doubling the standard deduction, which significantly reduces the number of North Dakotans and Americans who itemize and deduct their charitable contributions, without including a universal deduction to incentivize all taxpayers, not just those who itemize, who donate to charitable missions.
The House tax bill would nearly double the standard deduction and, as a result, shrink to five percent the number of taxpayers who itemize their charitable deductions – likely shrinking charitable giving by $13 billion annually. Ninety-five percent of taxpayers would receive no tax benefit for giving back to their communities. A solution – a universal or non-itemizer deduction – would allow all taxpayers, including those who take the standard deduction, to take a deduction for their charitable donations.
