Obama alienates wealthy donors with plan to limit charitable tax deductions

Neil Munro White House Correspondent
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Rich donors who give to charitable causes are angry that President Barack Obama is again pushing to extend taxes on charitable donations by the wealthy, said Diana Aviv, president and CEO of Independent Sector, a Washington,  D.C.-based advocacy group for nonprofits.

“In the last few days, I’ve been inundated, absolutely inundated” with angry emails from wealthy donors,” said Aviv, who gave Obama $2,800 in the 2008 campaign, and another $1,000 in June 2011, according to data collected by the Center for Responsive Politics. Aviv added that many of those emails are coming from donors who supported Democrats in 2008

One email from an Obama donor asked if Democrats believe “government does it best and charities are bystanders?” Obama’s proposal, the email said, “perhaps is enough to make me a Republican after all.”

Aviv herself had heatedly challenged the Obama’s tax plan, saying her donors fund museums, universities, art centers, parks, sports, art and ballet companies, as well as soup kitchens and other welfare programs for the poor. “That’s the way we give back … we want a society that is civilized,” she explained.

Most of Aviv’s board members represent liberal foundations, including the Robert Wood Johnson Foundation, the Rockefeller Brothers Fund, the Joyce Fund and many others. It also includes Catholic Charities and the United Way, which tend to help  low-income people.

The diverse group will lobby against the proposed tax increase, she said, adding that “this is the third year in a row that he [Obama] has offered this.”

However, the group does support the language in the president’s jobs bill that extends payroll-tax deductions to non-profit groups, which employ roughly 10 percent of the nation’s workforce. That extension, she said, will help the non-profits achieve more.

This breach between Obama and some of his wealthy supporters is echoed in other reports. On Sept. 6, Washington Post columnist Richard Cohen wrote that all his Democratic acquaintances in the wealthy Hamptons region on Long Island were disillusioned with Obama’s performance in office. (RELATED: Obama to speak at NC company that’s shipping jobs to Costa Rica)

“Over the Labor Day weekend, I went to a number of events in the Hamptons. At all of them, Obama was discussed,” he wrote. “At none of them — that’s none — was he defended … I am talking about writers and editors, lawyers and shrinks, Wall Street tycoons and freelance photographers, hedge funders and academics, run-of-the-mill Democrats and Democratic activists. They were all politically sophisticated, and just a year ago some of them were still vociferous Obama supporters. No more.”

Wealthy liberals were key to Obama’s victory in 2008, providing a large portion of his funding and helping him win over a majority of well-heeled voters. Six percent of voters earned $200,000 or more in 2008, and they gave Obama 52 percent of their votes. Republican Sen. John McCain won only 46 percent.

McCain did far better than Obama among middle-income Americans, but Obama was the first Democrat to win a majority of the wealthiest income bracket.

Until the 1990s, these wealthy voters were derided by Democrats and some in the established media as “Country Club” or “Silk Stocking” Republicans. These days some libertarians and social conservatives deride them as RINOs, short for “Republicans In Name Only.”

There is some evidence that Obama’s loss of support is already costing him donations from this wealthy demographic. For example, former Massachusetts Gov. Mitt Romney has won public support from a well-known 2008 Obama backer, Anthony Scarramucci, a managing partner at Skybridge Capital. In July, several former Wall Street Obama donors asked New Jersey Gov. Chris Christie to enter the race.

Still, Obama is attracting plenty of donations. His campaign announced in July that it had raised $6 million for the Democratic National Committeeand his re-election campaign during the second quarter of 2011.

Philanthropists angered by Obama’s proposed tax boost will initially keep their opposition private, Aviv predicted. “If they are people on the liberal or Democratic side of the equation … they more likely to first complain privately rather than publicly, just like when [George W.] Bush was in office,” she said. “People are very exercised about this.”

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