Grad student devises plan for donations

Author: Paul Gordon


(Daniel Kelly is a MSACCY student at the University of Notre Dame)

Daniel Kelly doesn't have the means to donate a lot of money toward the Hurricanes Katrina and Rita relief efforts. He is, after all, a graduate student at the University of Notre Dame.

But the Peoria resident has come up with an idea that could help not only victims of the hurricanes that ripped up the Gulf Coast last month, but assist average taxpayers as well.

The proposal would allow people who do not itemize on their income tax returns - roughly 70 percent of all Americans - to still be able to deduct up to $1,000 of their charitable donations for a year or two.

His proposal, with the backing of Notre Dame and his fellow students in the university's Masters of Science in Accountancy Program, could encourage more people to donate to the relief effort and ease the economic burden on the federal government.

"I wanted to be able to make a difference somehow. I can't personally give a lot toward relief efforts, but I do know enough about our tax system to know of a way to help," Kelly said.

"If this works out and can help the hurricane victims, the government and taxpayers, that would be great."

Kelly has mailed the proposal - complete with formulas detailing how it would work - to U.S. Rep. Ray LaHood, R-Peoria, and other Illinois legislators, including Senators Obama and Durbin. Classmates have mailed proposals to other legislators around the country.

In addition, an official with Deloitte-Touche, the firm which often advises Congress on tax matters, has seen the proposal and has invited Kelly to present it to Deloitte's National Tax Policy office next Monday in Washington, D.C.

In his cover letter with the proposal, Kelly explains the deduction would be available to those who don't itemize only if the donations were for hurricane relief.

"The tax system has been used as a way to drive social behavior and we believe that our proposed legislation will drive more donations to the hurricane relief efforts. President Bush has said that it will take billions of dollars to pay for the recovery and with our proposed legislation, a portion of the burden of the relief cost is taken off the federal government and spread out across the taxpayers," Kelly wrote.

LaHood said Monday that he hadn't seen the proposal yet. But when I explained what Kelly was proposing, LaHood said he liked the sound of it.

"This sounds like it could be a good idea. I will get in touch with (Kelly) soon and see if I can help him get this proposal to the appropriate people," said LaHood, mentioning the House Ways and Means Committee as well as the White House.

"It sounds as if this could really encourage more people to give toward hurricane relief. It could be a win-win and something we should look into," LaHood said.

Kelly said the reception he has received so far and the invitation to present it to officials at Deloitte-Touche have been exciting.

"I'm hoping I can make a difference and I'll admit it would be good exposure for me at Deloitte offices," said Kelly, who added he is going to work for Deloitte-Touche after he completes his studies.

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PAUL GORDON is Journal star business editor. Business File appears here each Tuesday. Gordon's e-mail address is