GREENFIELD — Local nonprofits are worried they may see a drop in donations due to Gov. Maura Healey’s proposal to put a cap on charitable donation tax deductions.

Section 32 of Healey’s proposed state budget includes putting a $5,000 limit on charitable deductions for individuals and $10,000 for married couples. If enacted, the Healey administration estimates the proposal could save the state up to $164 million during a time when tax revenues are slowing and spending is increasing. The governor’s budget includes a 7.4% increase in spending.

The idea was included in the governor’s Jan. 22 budget proposal, leading charities and nonprofits across the state to call for the House and Senate to reconsider in their drafts of the budget. The budget is now being reviewed by the House Committee on Ways and Means.

Kirsten Levitt, executive director and chef at Greenfield’s Stone Soup Café, said she feels Healey’s proposal is shortsighted and would hurt nonprofits. She believes a lot of people want to donate to support the causes they believe in, such as the pay-what-you-can community meals her organization is known for, but they don’t always have the financial means. Tax deductions allow more people to be able to donate, she said.

“I would say this will have an impact on multiple levels,” Levitt said. “The simple answer is if you cap charitable deductions, it will impact nonprofits.”

She added that donations from philanthropic individuals finance most of Stone Soup Café’s work. According to its annual report for 2023, individual donations made up 25.5% ($165,950) of the organization’s income, narrowly surpassing the amount that comes from government grants at 24.5% ($159,857). The rest of the organization’s income came from estate and legacy gifts, grants from foundations and corporations, catering events and fundraisers.

In 2023, Stone Soup Café provided 31,812 community meals, 110 weekly home deliveries and food pantry access to 1,204 shoppers. Levitt said she is unsure how much a tax deduction cap could impact Stone Soup Café, but it could limit how many meals the organization is able to provide.

Individual donations make up a large portion of the Franklin County Community Meals Program’s budget as well, according to Executive Director Valerie Hudson. She hopes donors will still support the program, but she fears capping tax deductions would lead to reduced donations.

“Most of our income is based on the generous donations of individuals, including those who wish to donate anonymously. Creating this cap may seriously limit the tax advantages for our larger donors,” Hudson said. “It may cause a decrease in contributions to our organization to accommodate other recipients and maintain a fiscal advantage. This is a hard position to place any philanthropist.”

She added that the governor’s proposal to only consider monetary donations as allowable deductions would be hurtful to the organization as well. The program manages a food pantry in Orange and a monthly mobile food bank in Turners Falls, and receives donations of nonperishable food items, diapers, household cleaning products and more.

“As for receiving no deduction for household goods and used clothing donations, it’s a shame that we have gotten to a place in our society where admirable acts and community support are solely based on the amount of money a person can donate,” Hudson said. “The future expansion of our organization depends on our ability to receive these items, new or used.”

Levitt said the proposal comes during a time when the availability of grant funding is uncertain and could be devastating. In January, President Donald Trump’s administration attempted to freeze federal funding, including grants to nonprofits. While the memo calling for the freeze was later rescinded, Trump aides have said reducing federal spending remains a top goal.

“In a time of fiscal conservancy, when the state and federal government isn’t opening up new avenues for funding, why would this be a good idea?” Levitt asked. “It’s gonna hurt us.”

Healey said she does not believe the cap would reduce donations. When asked if she would reconsider the proposal, she told the State House News Service that the state is operating with a tight budget, and it is the proposed cuts to federal funding that would truly harm the country.

“We’re dealing with a very tight budget situation as it is, and no amount of anything that’s in a state budget in Massachusetts or anywhere in the country can begin to make up for what President Trump is taking away from our states,” Healey said. “This hurts red states, blue states. It hurts Americans across the country. It’s why he needs to reverse course.”

Reach Madison Schofield at 414-930-4579 or mschofield@recorder.com. Information from State House News Service was used in this report.