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Sagging Support for the Arts

Legislators should resist ending contributors' tax breaks

March 09, 1997

Federal funding for the arts plunged after revelations in the early 1990s that public dollars had been used to fund art that gave new meaning to the word "risque," from postmodernist belly dancing at the Brooklyn Academy of Music to salacious photographs by Robert Mapplethorpe. Arts and humanities endowments were slashed from $334 million in fiscal 1995 to $209.5 million in fiscal 1996 and 1997.

Now the arts are being squeezed again, but this time for less sensational reasons:

% Stagnation in individual, foundation and corporate giving to the arts at a time when private giving to charitable social causes has risen by 11%. Nonprofit cultural organizations in America now rely on nongovernmental giving for 90% of their financing.

% Pressure in Congress to eliminate tax breaks for private contributions. In June, a tax code provision permitting deductions for charitable gifts of stocks and other property will expire, and a coalition of legislators is lobbying against renewal.

While California nonprofits managed to fend off efforts in the city of Berkeley last year to tax the gross receipts of nonprofit organizations, campaigns to impose similar municipal taxes are now underway in a dozen other states.

Federal and state legislators should resist these efforts. Tax incentives inarguably spur the kind of private giving that has become vital to survival of the arts. Donations of paintings, rare books and other "appreciated property," for instance, plummeted when their deductibility was eliminated in the early 1980s, but took off again when their deductibility was restored.

Last week, a nonpartisan presidential committee on the arts and humanities called on "corporations to raise giving levels to all causes." But with the increasing squeeze on corporations to steer charitable giving toward organizations that address social problems, their ability to help fund the arts is likely to be limited. Congress should at least retain the charitable deductions in tax law and meet the president halfway in his proposal to increase federal arts and humanities endowments from $209.5 million in fiscal year 1997 to $272 million in fiscal year 1998.

That funding amounts to a mere one-hundreth of 1% of the total federal budget. And as Harold Williams, president and CEO of the J. Paul Getty Trust, told The Times, given the "pivotal role the arts and humanities play in creating a civil and democratic society, it's a small price to pay."

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