Charitable-Giving Plan Divides Nonprofit Groups and Worries Donors

In effect, the proposed budget would increase the cost of giving to charity for wealthy donors by reducing the amount of money they can deduct from their taxes.

Independent Sector, the Partnership for Philanthropy Planning (formerly known as the National Committee on Planned Giving), and other nonprofit groups say that limiting the charitable deduction would put a damper on contributions, especially given the bad economy. Even though administration officials have sought to reassure charities that the economy will be better by 2011 when the provision would take effect, some charity leaders think financial conditions could still be rocky.