Two days from now, things could drastically change. And those changes are not the result of the typical New Year’s resolutions that have become an annual ritual for many Americans. As New Year’s Eve preparations are finalized and festivities planned, the looming dread of plummeting headfirst off of the fiscal cliff is not offering much cause for celebration. A rather dramatic term, ‘fiscal cliff’ refers to a combination of automatic tax hikes and extensive spending cuts that consequently have far-reaching economic implications for all Americans. The ‘fiscal cliff’ is perhaps dramatically coined, but the effects will be quite real.
On January 1, 2013, all tax cuts enacted during George W. Bush’s presidency will expire, and $54.6 billion in spending cuts will take effect on January 2, 2013. According to the National Council of Nonprofits , domestic programs providing basic human needs, education, public safety, disaster assistance and law enforcement, among others, will be slashed 9% across the board. The effects on nonprofits and the communities they serve could be devastating. As one nonprofit executive director based in Schaumburg, Ill. explained, “We are up you-know-what creek with no paddle in sight. All indications are demand for our services here and in surrounding areas will significantly increase, but we will have fewer resources to provide services that meet that demand. If this happens, it’s quite simple: families in need will suffer.”
The effect of across-the-board spending cuts on local communities is compounded by “four straight years of cuts at the local, state, and federal levels, including $1 trillion in cuts authorized by Congress in recent years.” (National Council of Nonprofits) Since 2008, Illinois nonprofits have experienced increased workloads while poverty has risen, a phenomenon that is reflected nationally as well. And what appears to be Congress’ favored solution to the fiscal cliff is equally as damaging as spending cuts. Seriously considering proposals to cap all itemized deductions, including the charitable giving incentive, Congress would in effect further reduce donations to nonprofits across the nation. Lowering the charitable deduction seven percent could reduce giving to nonprofits by as much as $7 billion a year, a 2.3 percent decrease (Philanthropy News Digest).
So what’s at stake? According to Annie Lowrey of the New York Times, the answer is $300 billion in nonprofit donations each year. What can be done? Join the chorus of nonprofit voices already mobilized and sharing with elected officials their fiscal cliff concerns. Tell elected officials how their constituents would be affected. Ask Congress to support your communities by: (a) opposing arbitrary, across-the-board cuts to domestic programs; (b) sustaining the charitable giving incentive. The cliff looms ahead, and going over the edge may be unavoidable, but perhaps there is a parachute that will slow the fall.