The Charitable [Deduction] Act (Update)
I am not all that great a political scientist. In fact, I am not a political scientist at all so I can’t explain why, if everybody is for a particular law, why the law ain’t a law yet. Seems like everybody is on board with expanding the charitable contribution deduction in a democratic fashion but it still isn’t done. What is the holdup?! We previously blogged that the Charitable Act was introduced in the Senate a few months ago. The same bill was only just now introduced in the House last week. Not surprising at all, just get the thing passed and signed, whydoncha! I am blogging about it again only because the Press Release over in the House has a couple of updated [though unattributed] post-Covid data points:
WASHINGTON – Today, [May 17, 2023] Representatives Blake Moore (UT-01), Danny K. Davis (IL-07), Michelle Steel (CA-45), and Chris Pappas (NH-01) introduced the Charitable Act to empower Americans to contribute to charitable causes and support local communities. In addition to a broad, nationwide coalition that touches nearly every sector of our economy, the bill is endorsed by more than 100 nonprofits in Utah.
The Charitable Act extends and expands the expired charitable deduction for those who do not itemize on their tax returns, ensuring that every American who donates or tithes is able to benefit from both the standard deduction and the charitable deduction. Specifically, this legislation would raise the previous $300/$600 cap on the non-itemizer deduction to 1/3 of the standard deduction, equal to roughly $4,500 for individuals, $9,000 for joint filers.
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Background
Of the $484.85 billion donated to charities in 2021, 67% of donations came from individuals. While charitable contributions from foundations and corporations have grown in recent years, the share of dollars donated by individuals has fallen for the fourth consecutive year. This alarming trend has serious implications for the churches, museums, food banks, and other nonprofits that serve our communities and unite us as Americans.
When Congress created the temporary universal charitable deduction in 2021 and 2022, the result was the generation of $10.9 billion for charities, with 25% of that coming from Americans making less than $30,000. Given the impact of the smaller deduction, the provisions in the Charitable Act will help supercharge charitable giving.
A letter of support from the Utah Nonprofits Association can be found here, and letters of support from the National Council of Nonprofits and the Charitable Giving Coalition are linked here and here, respectively.
Statements of Support
“According to data compiled by AFP’s Fundraising Effectiveness Project, the number of small donations went up in 2020 and 2021 after Congress enacted a universal charitable deduction but then small-gift donors collapsed in 2022 after the temporary universal charitable deduction was not renewed,” noted Mike Geiger, President and CEO of the Association of Fundraising Professionals. “On behalf of our more than 27,000 fundraising professional members that raise more than $100 billion annually for charities, we thank Representatives Blake Moore, Danny Davis, Michelle Steel, and Chris Pappas for their leadership in championing the Charitable Act to restore this proven giving incentive.”
darryll jones