American Philanthropy: Lost in the Politics of the Sequester

In the high-stakes game of sequestration being played out between the White House and Congress, Democrats and Republicans, one side seems certain to lose: America’s nonprofit sector.

If sequestration occurs and $85 billion in automatic cuts are enacted, funding for charities in the form of grants and government contracts will be dramatically curtailed. Even if a compromise is reached and sequestration is avoided, deep cuts in nonprofit funding — in addition to caps on itemized deductions, including the charitable deduction — could still be implemented.