U.S. President Barack Obama smiles during his prime time news conference in the East Room of the White House in Washington, March 24, 2009. REUTERS/Jason Reed

WASHINGTON (Reuters) - Altruism, not a lower tax bill, should be reason for donating to charity, President Barack Obama said on Tuesday.

“If it’s really a charitable contribution, I’m assuming that that shouldn’t be the determining factor as to whether you’re giving that $100 to the homeless shelter down the street,” Obama told a nationally televised news conference.

Under the plan announced in Obama’s budget in February, tax deductions for charitable contributions from people earning $250,000 a year or more would be limited to 28 percent, down from 35 percent.

Charity groups worry that the change will reduce giving at a time when demand for their services is rising because of the recession.

Obama said it would simply bring the tax benefits for the wealthiest 1 percent of Americans in line with everyone else who gives to soup kitchens, medical research groups and other charities.

“It’s not going to cripple them. They’ll still be well-to-do,” he said.

The weak economy would do more to discourage charitable giving than any changes to the tax code, Obama said.

“The most important thing that I can do for charitable giving is to fix the economy, to get banks lending again, to get businesses opening their doors again, to get people back to work again. Then I think charities will do just fine,” he said.

Estimated donations in the United States reached $306 billion in 2007 and seven out of 10 households gave to charitable causes, according to Indiana University’s Center on Philanthropy.