The Wall Street Journal
December 6, 2012
By LAURA SAUNDERS And HANNAH KARP
Tax uncertainty in Washington is setting off a mad scramble among wealthy taxpayers and charities to maximize donations before the end of the year.
Their worry: The tax deduction for charitable giving, a fixture of the tax code for nearly a century, is coming under pressure as part of a broader fiscal agreement now being hammered out on Capitol Hill.
The rush shows the extent to which wrangling in Washington over deficit reduction already is affecting the way taxpayers are spending their money. In addition to rethinking their charitable giving, some taxpayers are accelerating large medical expenses, selling appreciated stock and even prepaying mortgages, financial advisers say.
"People want to take advantage of 2012's certainty" said Benjamin Pierce, head of Vanguard Charitable, a nonprofit group affiliated with money manager Vanguard Group Inc. "Front-loading is very much on their minds."
Fidelity Charitable, an affiliate of Fidelity Investments, took in $1.2 billion for the first nine months of 2012, up 63% from the same period in 2011, while Schwab Charitable, an affiliate of Charles Schwab Corp., SCHW +1.01% recorded a 74% jump for the third quarter. Vanguard Charitable saw a 43% increase through the end of November.