Nonprofits face fall off fiscal cliff

AUSTIN (KXAN) - Families and taxpayers are trying to figure out exactly how the upcoming “fiscal cliff” could impact them, but non-profit organizations are already expecting the worst.

“It could be a pretty big kick in the gut,” said Randy Allen with the Salvation Army.

In Washington, President Barack Obama and congressional Republicans are seeking agreement to avoid automatic spending cuts and tax increases that will occur at year's end.

Obama, a Democrat who just won re-election wants to allow tax cuts to expire for the wealthiest Americans. Republican leaders are resisting, preferring to tackle government entitlements to save money.

Federal funding to non-profits could be cut and donors paying higher taxes might not have as much money to give.

The combination is a dangerous one for organizations that depend on both sources for funding.

Another potential setback could come if Congress caps tax deductions on charitable donations.

Allen estimated that they would lose between 10-15% of their $8 million budget if no solution is reached before Dec. 31.