The hearing was to examine the itemized deduction for charitable

Karen Rathke, president of the Heartland United Way, asked Congress last week to keep charity contributions as tax deductible in the federal tax code and not to limit the charitable deduction for taxpayers.

"If you look at cutting programs for the most basic needs for the people in our communities at the same time that you talk about removing incentives for people to give to charities, who are also trying to balance an increased demand on programs and services with a reduction in funding for those programs, you are kind of caught between both doors," she said, explaining that, if the sequester cuts happen, it will have a double impact on communities.

Rathke, who said she was in Washington, D.C., for National United Way meetings already, was one of about 43 people from different sectors of the country who testified on Feb. 14 in front of the House Ways and Means Committee. Representatives of health care, education, religious and arts organizations also testified.

The hearing was to examine the itemized deduction for charitable contributions as part of the committee's work on comprehensive tax reform.

"At a time when government is contracting, it is critical that the nonprofit sector be as healthy and resourced as possible," she told the members of the committee, adding that United Way's donors are encouraged to make larger gifts because of the charitable deduction. "Any action which has negative impacts on the sector only puts further demand on an already stressed system."

United Way Worldwide Chief Executive Officer Brian Gallagher, as well as a dozen other state and local United Way CEOs, testified on the charitable tax deduction and spoke about the central role that charitable giving plays in strengthening communities.

House Ways and Means ranking member U.S. Rep. Sander Levin of Michigan pointed out that the charitable deduction is widely used by millions of taxpayers. The deduction was established in 1917.

"The charitable deduction is among the 10 largest tax expenditures in the code, benefiting almost 1.1 million charities and more than 37 million Americans who contribute to Section 501(c)(3) organizations every year," he said. "In 2010, it is estimated that individuals donated $210 billion to charitable organizations, of which they claimed $170 billion on their tax returns."

Eleven congressional groups have formed to examine different aspects of tax reform, including one assigned to focus on charitable and other tax-exempt organizations. After the groups' work is completed, the Joint Committee on Taxation will prepare a report for the full Ways and Means Committee that is due by April 15.

Rathke called her testimony "an awesome experience" and said she felt that the congressmen and women really listened to the testimony.

"I think, as they go forward with these tax reforms, that they want to be sure they have looked at it from all angles," she said. A few of them, including U.S. Rep. Adrian Smith, asked her questions after her testimony.

"I think what they heard was that giving to charities is doing some really great things," Rathke said. She had the chance to visit with some of the representatives outside the chambers.

She also shared stories on the local impact that charitable giving has on people in Hall, Hamilton, Howard and Merrick counties, including how United Way's partners helped a 7-year-old girl whose face was swollen from tooth decay and infection, a mom rationing out her blood pressure medicine and a 9-year-old boy who was picked on for his clumsiness as he wore oversized shoes.

"The good life, as many people refer to living in Nebraska, is tougher these days for many," Rathke testified. "In Grand Island Public Schools, 67 percent of the students qualify for free and reduced (price) lunches, which means limited resources to handle life emergencies. This fall, 26 kids woke up on the first day of school with the homeless shelter as their address.