Tax cuts unlikely to help charities heal from budget axe

WASHINGTON — A tax cut plan to help charities plug the gaps created by massive federal budget cuts is winning little enthusiasm among officials of Jewish social service agencies.

The measure, known as "The Choice in Welfare Tax Credit Bill," would give taxpayers a dollar-for-dollar tax credit up to $100 for individuals and $200 for joint filers when they donate to a qualified charity.

It is being spearheaded by Sen. Rick Santorum (R-Pa.) and Reps. Jim Kolbe (R-Ariz.) and Joe Knollenberg (R-Mich.).

Officials of Jewish charities welcomed the legislation but said it was not likely to ease the burden government funding cuts would place on private charities.

"If the federal government can suggest ways to increase contributions, that would be fine, but I don't think taking government money away and replacing it with charitable donations will work," said William Rapfogel, executive director of the Metropolitan New York Coordinating Council on Jewish Poverty. A network of 25 local agencies, Met Council assists the poor in housing, entitlements and other aid.

That view was bolstered by a recent study of Jewish agencies including facilities in San Francisco, which predicted the Republican plan to balance the federal budget would deprive many elderly, poor and disadvantaged Americans of the services they now receive from Jewish charities nationwide.

The study, released June 15, examined 108 charities around the country. It estimated Jewish charities will face a huge gap in funding by 2002 if spending guidelines set by the Senate and House of Representatives are established.

Among the Jewish social service agencies profiled in the study were the Jewish Home for the Aged and United Jewish Community Centers in San Francisco; the Jewish Family Service of Los Angeles; and the Jewish Family Services and Jewish Vocational in Atlanta.

Rapfogel said the tax credit could boost donations to such organizations, but it does not specify what charities the money helps. Furthermore, he said, it doesn't account for the cost of living differences between the states.

"It may increase donations, but there's no needs assessment here," he said. "There's no suggestion that this will target donations to particular areas," which may need it most.

Martin Wenick, executive vice president of the Hebrew Immigrant Aid Society, which assists Jewish refugees and immigrants, also voiced skepticism.

"I'm not convinced that this in and of itself is sufficient to stimulate large sums of private dollars that would replace the loss of federal funds," he said. "I think this would be a mere dot on the horizon in terms of assistance" to charities.

Although encouraging people to donate to charities is positive, Wenick said he did not think the bill would have a major impact on fund raising.

A tax credit is money subtracted from what a taxpayer owes the government, while a tax deduction comes out of a taxpayer's adjusted income. Only taxpayers who owe the government money will be eligible for the tax credit.

No congressional hearings have been scheduled on the measure.