NATIONWIDE — It's hard enough for for nonprofits to keep a steady flow of financial support to do what they need to from operating costs to serving the community.
Now, according to the National Council of Nonprofits, the House GOP's proposed tax plan would discourage people from giving.
While the bill known as the Tax Cuts and Jobs Act promises to provide tax relief and a simpler filing process for businesses and individuals, the group is concerned that those cuts will affect charitable deductions.
The council's president, Tim Delaney, says many middle-class families would be discouraged from itemizing their deductions because they would no longer get a tax break.
Therefore, more people will opt for taking the "standard deduction" over itemizing.
The "standard deduction" is the flat amount that the tax system allows you to deduct, depending on if you're single or married.
Delaney says 30 percent of households tend to itemize their deductions, but if the bill passes, it'll go down to 5 percent.
That means, nonprofits could lose up to $13 billion.
"If you take $13 billion away from the entire nonprofit community, we make up 10 percent of the American workforce. So, you take $13 billion away, that means a lot of jobs are gonna get cut,” Delaney said.
The council also stated that charities tend to get 10 percent of its earnings near the end of the year, around the holidays.
The tax overhaul hasn't been finalized yet. Both the House and Senate will still have to reconcile the differences in their plans.