Media Quote Ruth Madrigal on Impact of GOP’s Tax Plan on Nonprofits

November 6, 2017

Steptoe partner Ruth Madrigal was quoted by several media outlets following the unveiling of the Republican tax reform bill on how the plan will impact charitable giving and nonprofits. While the plan would preserve the charitable deduction for taxpayers who itemize, it would nearly double the standard deduction for taxpayers, reducing the number of itemizers and the utility of the deduction. The plan would also make changes that could significantly impact nonprofit revenues and operations, such as ending 501(c)(3) tax-exempt bond financing and New Markets Tax Credits; expanding the reach of the unrelated business income tax; taxing endowment earnings of certain private colleges and universities; and loosening the decades-old ban on political campaign activities for churches. 

Ms. Madrigal tells The Chronical of Philanthropy that she worries about the implications of taxing college endowments as the House bill would. Regarding the excise tax, she adds: “I get concerned that it could be expanded to other types of charitable organizations. And if you’re starting to tax the investment income of charities, what does tax-exempt even mean?” 

Ms. Madrigal tells Bloomberg BNA: “It cuts down on the revenue that is currently going to pay for university services to students, because this chunk of money will go to the government. Either the colleges have to replace that chunk of money or cut services. Either way, the students are in the crosshairs.”

The full articles can be read at Bloomberg BNA (subscription required), The Chronical of Philanthropy and Philanthropy News Digest.