Nonprofits wary of federal cuts, changes to tax deductions

December 12, 2012

North Carolina Center for NonprofitsNonprofits in North Carolina fear these cuts will result in reduced funding for charitable programs, according to the N.C. Center for Nonprofits.

For example, according to a report by Sen. Tom Harkin, Head Start programs in North Carolina would be reduced by $13.4 million, resulting in cuts to grants for child care, maternal care and child development that support the work of nonprofits, the center said.

And nonprofits are also wary of a negotiation proposal to cap itemized tax deductions -- a chief incentive for charitable giving.

"A cap on itemized deductions would be exhausted by fixed-cost deductions, such as for mortgage interest and state/local taxes," the center said in a statement. "A cap would also effectively eliminate the tax incentive for most Americans to give to nonprofits.

"Dismantling the charitable giving incentive would devastate North Carolina's nonprofit sector and those who are served by it in countless communities," the center said.