Filling the Charitable Gap

Can business owners, employers and private charities fill the gap?

The Republican Congress is counting on private charities, business owners and citizens to take care of people slated to lose their welfare benefits.

“Private charities are more effective, they are less expensive, and they are better for the people they help,” House Speaker Newt Gingrich declared in his first speech as Speaker of the House.

But in recent years, charitable contributions have tailed off. In 1989, U.S. households contributed an average of $335 to charity. By 1993, contributions dropped to $270, according to Business Week. Since 1989, corporate contributions have also remained flat, totaling about $6 billion a year.

On Feb. 7, 115 charities sent a strong message to Congress, saying they can’t meet the needs of the poor if the government backs away from providing aid.

To encourage Americans to dig deeper, a few bills have been introduced in Congress. One would let taxpayers deduct 110% of their charitable gifts. Another would let taxpayers give 10% of their federal tax payment, up to $2,500, to a charity that fights poverty.