Wednesday, October 31, 2000
Director of Communications
Charitable Tax Deduction Would Stimulate Giving, Improve Massachusetts' Poor Generosity Rating
A state charitable tax deduction would stimulate $1.43 billion in new giving to nonprofit organizations over the next five years and, in the process, correct Massachusetts' reputation as one of the least generous states in the nation.
Currently Massachusetts ranks in the lowest third of states in terms of the generosity of its residents, according to a new index developed by the Beacon Hill Institute at Suffolk University. Question 7 on next week's election ballot, which would permit state taxpayers to take a deduction for charitable contributions, would lift the state to the middle or even top third of states in terms of its generosity. The new giving stimulated by the deduction would exceed the tax revenue lost by $410 million.
Under current law, charitable donations may be deducted from federal but not Massachusetts income taxes. Ballot question 7 would allow charitable donations to be deducted from Massachusetts income for both itemizers and nonitemizers. The law would take effect on January 1, 2001. With the charitable deduction, Massachusetts would join 33 other states that offer tax incentives for giving to nonprofit organizations.
The Beacon Hill Institute developed the Generosity Rate index in order to analyze the proposed charitable deduction. The Generosity Rate measures the value of charitable deductions itemized on federal tax returns as a fraction of adjusted gross income, scaled so that the most generous state has a Generosity Rate of 100%. Massachusetts, which currently ranks 39th out of 50 in terms of its Generosity Rate would rise to somewhere between 14th and 30th with the tax deduction, putting it in either the top third or the middle third of states rated according to their generosity.
David Tuerck, BHI Executive Director and Chairman of the Suffolk University Department of Economics, said, With this state charitable tax deduction, taxpayers will save $5.80 for every $100 they give to nonprofit organizations. As an added bonus, Massachusetts will lose its `ungenerous' reputation.
The Beacon Hill Institute at Suffolk University is a nonprofit, nonpartisan economic research organization. The BHI FaxSheet, Improving the Generosity Rate, is available at or by calling BHI at 617/573-8750.
Go to FaxSheet:Improving the Generosity Rate
Charitable Tax Deduction Would Boost Charitable Giving in Massachusetts
Revised format on: 02-Jul-2003 3:04 PM
Webmaster: Frank Conte
©2000-2003 Beacon Hill Institute for Public Policy Research at Suffolk University, All Rights Reserved.