Maybe before the glittery ball falls in Times Square, signaling the arrival of the New Year, the House of Representatives, the Senate, and the President will agree on a grand spending and taxing deal, thus avoiding the dreaded “fiscal cliff“–the expiration of a host of tax cuts and the imposition of mandatory spending cuts.

If no such magic happens, then those mandatory cuts–the dreaded “sequestration“–will go into effect: $600 billion out of the defense budget and $600 billion out of domestic spending over the next ten years. Just what services will those domestic spending cuts affect? That’s not at all clear, but many faith-based organizations that receive federal dollars to expand the services they can provide are sure to be affected.

Then again, Congress and the President might get busy and come up with that grand long-term budget deal, adjusting spending and revenues so that the annual deficits get smaller and smaller and eventually the enormous national debt can actually be put on a diet. Spending cuts could themselves negatively affect those groups that partner with government. More broadly, in the search for more revenue the federal deduction for charitable contributions or other financial support for nonprofits (such as the nonprofit mailing rate) might be chopped or eliminated.

The fiscal health of the nation requires drastic action. Still, in deciding which path to take, our elected leaders need to remember that the flourishing of nonprofits, secular and faith-based, and the well-being of many poor and distressed people and communities, depends in part on government spending and taxing decisions.

Keep up with news about the charitable tax deduction at the Alliance for Charitable Reform.