Break out your drums and pom-poms to join the nonprofit pep rally. Yesterday, Reps. Chris Smith (R-NJ) and Henry Cuellar (D-TX) introduced a universal charitable deduction bill in the House of Representatives.
The Charitable Giving Tax Deduction Act (H.R. 5771) would amend our tax code to all taxpayers the opportunity to take the charitable deduction. Independent Sector has been working closely with Smith’s office as they crafted the bill.
For more than 100 years, the charitable deduction has been a powerful incentive for giving and ensuring individuals have the power and ability to improve lives in their own communities. Unfortunately, this year marks a record low for the number of taxpayers able to claim the charitable deduction. This change means charitable investments in our communities could be guided primarily by a very small number of citizens.
This new bill is cause for celebration (and action) across the nonprofit sector! Last year, Independent Sector also commissioned research by Indiana University Lilly Family School of Philanthropy, which shows that this type of universal charitable deduction would increase giving by nearly $18 billion. This infusion of resources will change lives and communities across the country at a time most charities face decreasing revenue and increasing costs and demand for their services. In addition, a 2017 bipartisan poll of voters found that 75 percent of all voters supported expanding the charitable deduction to all taxpayers.
“This bill helps us live up to the idea that charitable giving is ingrained in our national identity,” said Daniel J. Cardinali, president and CEO of Independent Sector. “Expanding the charitable deduction to all taxpayers will ensure that more people actively participate in building better futures for themselves, their neighbors, and their communities.”
“A true universal deduction is critical to correcting the impact of last year’s tax legislation,” said Vikki Spruill, president and CEO of the Council on Foundations. “At its core, our nation’s charitable giving policies should encourage and enable those small and medium-sized donors who serve as a powerful engine in the sector’s ability to assist communities. This legislation brings those givers back into the fold by expanding the charitable deduction to millions more.”
This is a pep rally, not a victory party. The hard work is ahead of us, so let’s strike up the trumpets and cheers. Now, it’s time for charitable organizations to get excited, come together, and collectively show our support for a policy that could transform all citizens’ ability to invest directly in solutions that work in their hometowns.