The push for the reinstatement of the universal charitable deduction got new life this week with the introduction of “The Charitable Act” federal legislation in the U.S. House of Representatives.
U.S. Reps. Blake Moore (R-Utah), Danny K. Davis (D-Ill.), Michelle Steel (R-CA), and Chris Pappas (D- NH) introduced the “Charitable Act” to give tax relief to Americans to contribute to charitable causes, tithe and support local communities.
Moore, Steel and Davis are members of the House Committee on Ways and Means. Chris Pappas is a member of the House Committee on Small Business.
“The Charitable Act” extends and expands the expired charitable deduction for those who do not itemize on tax returns so that anyone who donates 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 one-third of the standard deduction, equal to roughly $4,500 for individuals and $9,000 for joint filers.
“Nonprofits in New Hampshire and across the country have stepped up, again and again, to help those who are most in need,” said Pappas via a statement. “It’s critical we also do our part to support their work, and through them, our communities and our neighbors. That is why I am proud to work alongside Congressman Moore to reintroduce this bipartisan legislation to expand the charitable giving deduction, support the work of our nonprofits, and highlight the charitable spirit of our nation.”
Of the $484.85 billion donated to charities in 2021, 67% was 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, according to a joint statement from the bill’s sponsors.
A letter of support from the Utah Nonprofits Association is here, and letters of support from the National Council of Nonprofits and the Charitable Giving Coalition are linked here and here, respectively.
“Charitable giving has not kept up with inflation, let alone met increasing community needs. The Charitable Act proposes sound tax policy that would incentivize millions more taxpayers to give to their local community-based organizations, enabling people to feel more invested in, engaged with, and supportive of the collective success of their neighbors and community. The networks of the National Council of Nonprofits enthusiastically endorse this vital legislation,” said Tim Delaney, president and CEO, National Council of Nonprofits via a statement.
“The Nonprofit Alliance would like to commend the strong bipartisan leadership of Congressmen Moore and Pappas on the Charitable Act. This legislation, which will broaden the base of charitable donors, is vital toward achieving a vibrant charitable sector beneficial to the entire nation,” said Shannon McCracken, chief executive officer of The Nonprofit Alliance via a statement.
“By extending a robust charitable deduction to generous lower-income givers, the Charitable Act will help ensure multiple thousands of religious congregations and faith-based charities thrive and continue providing care for our needy and hurting neighbors,” Brian Walsh, executive director of Faith & Giving Coalition, said via a statement.
