FUNDING ALTERNATIVES TO GOVERNMENT:

Senate's Tax Bill Includes Incentives for Charity Gifts (LYNNLEY BROWNING, 11/22/05, NY Times)

Under the Senate bill, people who do not itemize deductions on their federal income tax returns would for the first time be able to deduct the amount they gave if it exceeded certain thresholds. The minimum would be $210 for individuals and $410 for married couples. [...]

The provision would last two years and could increase charitable giving by $1 billion a year at little cost to the government, said Patrick Lester, director of public policy for the United Way of America, the nation's largest charitable organization.

"This is by far the most important provision" in the Senate tax bill, Mr. Lester said, adding that he was particularly pleased there was no maximum amount that could be donated tax free.

Because lower-income taxpayers are less likely to itemize, the provision could prompt charitable giving to nonprofit organizations like churches and soup kitchens.

Another provision in the Senate bill would make it possible for taxpayers who reach age 70 1/2 and who have not yet fully tapped into their individual retirement accounts to make tax-free donations to charities straight from the accounts. Taxpayers must now cash out of their accounts and pay taxes on the amount withdrawn before making donations.

The provision could lead to several billion dollars of additional charitable giving a year, according to estimates by the Congressional Joint Committee on Taxation.